North Wales’ health board faces more money woes as budget deficit of £40m is agreed

North Wales’ regional health board is facing yet more money woes after agreeing to set a budget deficit of almost £40m for the next financial year.

The figure does not include the impact of the coronavirus pandemic, which is estimated to put a further £10m dent in its funds.

If the forecasted shortfall pans out as expected for 2020/21, it will be sixth year where Betsi Cadwaladr University Health Board has failed to achieve a break-even position.

Officials have acknowledged that the situation needs addressing and are aiming to make savings of £45m as the organisation approaches almost five years of being under special measures.

The health board’s chief executive will also be required to write to the head of NHS Wales to explain the financial difficulties.

In a report presented to board members last week, Sue Hill, interim executive director of finance said: “The health board’s financial position is not acceptable, and the health board must plan on the basis of providing excellent health services within the constraints of the available resources.

“This requires a balance between managing clinical risk and corporate risks to provide safe services which are delivered efficiently and effectively.

“Nonetheless, the delivery of safe services of a high quality cannot be compromised in pursuit of rapidly achieving financial balance.

“The allocation of funding from Welsh Government will bring with it clear expectations on the health board’s performance against our targets.

“As a result of this, the health board will remain focused on directing resources to deliver against priority areas.”

The minutes of the meeting show that the board agreed to approve a savings target of £45m as part of a budget deficit of £40m for the 2020/2021 financial year.

Ms Hill said the figure excludes the financial impact of dealing with the COVID-19 outbreak, which has been flagged up on the board’s risk register.

The £10m estimate is based on the extra resources that may be required to tackle the virus.

In England, the UK Government has agreed to wipe off £13.4 billion worth of debt to ensure the NHS has the necessary finances to respond to the coronavirus.

The First Minister of Wales was asked whether his government would follow suit earlier this month, but said consequential funding from Westminster was not available to do so.

He said: “There will be no consequential because this is not real money, it is just an accountancy exercise. There is debt on the book, and they cancel the debt.

“They don’t use money for it – they just treat it in that accounting way. We’ll get no consequential for Wales as a result as levels of indebtedness in the Welsh NHS are simply not of the same order.”

By Liam Randall – Local Democracy Reporter