Welsh NHS £100m In Debt

The scale of the debt facing the NHS in Wales was revealed yesterday, topping £100m and threatening the future of hospitals around the country. Health Minister Dr Brian Gibbons last night admitted that the health service’s accumulated debts were far worse than previously estimated. He put the figure at “around £100m” and also warned that last year’s financial pressures were still present.

But his claims that this year’s debts were better than expected have been brushed aside by AMs.

The Conservatives have called for a “wide-ranging” financial strategy to tackle the growing problem of NHS deficits.

Jonathan Morgan, the party’s health spokesman, said, “Ministers cannot be allowed to shift the blame for this failure onto trusts and local health boards.

“When it comes to a matter of priorities, health bodies are merely following orders.

“If Brian Gibbons and Rhodri Morgan had not done their sums so badly, then NHS organisations would have had enough money to cover new clinical contracts, meet centrally imposed targets and pay for new lifesaving drugs.

“There have been major problems meeting these objectives. As a result it is little wonder the deficits are as high as they are.”

In a statement to the National Assembly yesterday, Dr Gibbons said that NHS trusts ran up a deficit of about £26m, although local health boards were £2m under-spent at the end of 2005-06. This was despite a 7% increase in the health budget.

He added that two local health boards and seven NHS trusts – half of all Welsh NHS trusts – had failed to achieve their financial targets.

And three health communities have had a financial recovery team parachuted in by the Assembly Government to help its services improve their value for money.

As a consequence, NHS trusts could be forced to adopt rigid saving plans, which could have an impact on patient services.

Gwent Healthcare NHS Trust has already announced efficiency plans across its 21 hospitals to help claw back £12m.

And Swansea NHS Trust has announced plans to cut 170 beds, after external consultants had found the trust had “too many” beds. Some of the savings from the closures will help the trust to offset its £12m debt.

Politicians have expressed fears that hospital wards could be the next casualties as they may be closed to cut costs.

Last year the growing deficit saw some NHS trusts forced temporarily to close minor injury units and suspend some hospital services in a bid to save money.

The Assembly Government’s plan to cut waiting times to just six months by 2009 could also be jeopardised by spiralling NHS debts.

In his statement Dr Gibbons said, “The NHS still has significant opportunities to increase efficiency to achieve financial balance and meet service targets without impacting on the quality of care provided to patients.

“This is a theme that we will be progressing more systematically with the service in 2006-07.

“Although 2005-06 was forecast to be a very difficult financial year, the outturn deficit was significantly less than originally anticipated and represented less than 1% of total funding.

“The Assembly Government takes the financial health of the NHS very seriously.”

He added that the NHS must be “reconfigured” if it is going to become more efficient.

Considerable opposition has already emerged to local plans to restructure the NHS in response to the Assembly Government’s Designed for Life strategy.

Campaigners have already forced local health managers to rethink plans to downgrade hospitals in Pembrokeshire and Ceredigion, and activists are now planning to defend their local hospitals’ futures across Powys, as plans effectively to close four community hospitals were published yesterday.

Helen Mary Jones, Plaid Cymru’s Shadow Health Minister, said, “The current fiasco over proposals by local health boards to close hospital services in local communities following Designed for Life is deplorable.

“There has been little mention of how primary care services are to be developed.

“This demonstrates the lack of focus on how to improve the NHS by Labour ministers.”

Dr Kevin Sullivan, policy and public affairs manager for the Welsh NHS Confederation, said, “Across Wales – as across the UK – NHS organisations are facing real financial pressures as costs increase.

“For example, new drugs and treatments, and new contracts to help recruit and retain doctors and other key staff, are good news for patients. But they come at a cost.

“It’s wrong, however, to think that all changes to the NHS are driven by money.

“The simple fact is that the NHS needs to keep pace with a changing world. Even if the budget were doubled we would still need to change the way the NHS works, to ensure it can deliver 21st-century care.”