Welsh Government ‘write off’ £470m health board debts

Health Minister, Vaughan Gething, has effectively written-off the £470m owed by NHS organisations in Wales so they can focus on recovering from the Covid-19 pandemic.

At today’s lunchtime Welsh Government briefing it was explained that since 2014 the Welsh Government has provided strategic cash support of £470m for historic debt and this will now not have to be repaid. Eight out of the eleven NHS organisations in Wales broke even in 2019-20.

Back in April Wrexham.com asked the First Minister about writing off of health board debt in Wales, as earlier that day it had been announced England had done so to the tune of £13bn. At the time First Minister Mark Drakeford called it “an accountancy exercise” noting no consequential “because this is not real money”, pointing out that the level of indebtedness of trusts in Wales “are simply not of the same order” as England.

Mr Gething said today, “It is now six years since the NHS Finance Act 2014 introduced the duty to break even over a three-year period. This year’s accounts show four health boards haven’t been able to operate within their budgets since 2014 and together have amassed deficits of more than £600m. We have provided strategic cash support of almost £470m to these health boards over this period.”

“This level of historic deficit is clearly a barrier to the NHS as it starts to plan for the term recovery from the coronavirus pandemic and it holds these health boards back from achieving financial balance.”

“Until now, there has been an expectation NHS organisations would repay this deficit and the cash support. To do this, they would need to generate underspends. I have decided the £470m of cash support will not need to be repaid and when an organisation achieves its three-year break-even duty, it will not be required to repay any historic deficits.”

“This will provide certainty to these organisations, helping them to focus on the immediate recovery from coronavirus, while also planning for the future and striving for financial balance.”

A summarised account of the Health Boards, NHS Trusts and Health Education and Improvement Wales, will be published in August following sign-off by the Auditor General for Wales.

A written statement gives more detail to the finances, explaining “As in previous years, the four health boards that have failed to meet their statutory financial break-even duty for the three-year period of assessment have received qualified regularity opinions from the Auditor General for Wales on their 2019-20 accounts.

“Overall, the 2019-20 outturn for NHS Wales was a deficit of £89 million, reduced from £96 million in 2018-19. Whilst I continue to have concerns about the financial position of the three health boards that continue to be in deficit, I am pleased at the progress Cardiff and Vale University Health Board has made in 2019-20 with the development of an approvable Integrated Medium Term Plan as well as ending the financial year in balance. Their experience demonstrates that it is possible for organisations to come out of the higher levels of escalation and intervention by Welsh Government and return to routine levels of monitoring.

“It is now six years since the implementation of the NHS Finance Act 2014 and the introduction of the three year break even duty. The last two years in particular have seen a sustained improvement in overall financial performance and the number of organisations now in financial balance. However, the four organisations that have been unable to operate within their budgets over this period have accumulated deficits totalling over £600 million since 2014. In addition, Welsh Government has had to provide strategic cash support totalling nearly £470 million to these organisations to enable them to meet their financial obligations to staff and suppliers whilst in deficit.”

Yn fyw gyda'r Gweinidog Iechyd, Vaughan Gething | Live with Health Minister, Vaughan Gething https://t.co/B7fcgomtNd

— Welsh Government (@WelshGovernment) July 7, 2020