Welsh NHS Faces £700 Million Financial Black Hole

The Health Foundation has authored a report which suggests that the NHS in Wales faces a £700 million black hole in the coming years.

And the think tank indicates that this could occur within just three years.

The Health Foundation suggests that the NHS in Wales is facing the most financially challenging period in its history, with the shortfall approximately equal to 10% of the overall annual budget for the Welsh healthcare system.

In addition to the worrying impression it presents, the report also calculates that the cost of social care may nearly double in Wales by 2030.

This is just the latest prediction which indicates that the greying population of the UK, combined with other demographic, organisational and financial factors, will pose massive challenges to the NHS in the foreseeable future.

Responding to the report, the Welsh Government stated that they are “working to ensure our NHS is financially sustainable for the future and welcome the optimism in today’s report”.

One possible route to help plug the funding gap discussed by the report is the capping of staff pay increases in the Welsh NHS.

But the report warns that maintaining a pay cap over the longer term could seriously affect staff morale and cause big problems in trying to attract and keep staff in the Welsh NHS.

And this could also ironically lead to increased spending, with the Welsh NHS instead forced to rely on agency staff.

Indeed, the authors note that spending on agency staff in the Welsh NHS rose by 60% in just one year between 2014-15 and 2015-16.

Meanwhile, the authors estimate that the pressures on social care will rise at a faster rate (4.1% annually) than the pressures on NHS.

In order to match this demand, the social care budget in Wales would be required to almost double to £2.3 billion annually within just a 15-year timeframe.

Without any action, additional pressures could mean the NHS budget might have to increase from £6.5 billion now to £10.4 billion by 2030, the report opines.

This would require a 3.2% annual real terms increase in NHS funding.

This is the first report by the Health Foundation into the Welsh health service, with the think tank taking twelve months to compile all of the data and arguments contained within it.

The London-based research organisation was set up as an independent charitable trust with a £500 million endowment in 1998.

More news on the situation of the NHS will be revealed in the Senedd on Tuesday, as the Welsh assembly convenes for the annual Budget.

 

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