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NHS chiefs warn of cash squeeze NHS 'spends £1bn of budget badly'
(about 7 hours later)
Staffing levels and funding for patient care at hospitals throughout Wales will be under "enormous pressure" next year, managers have warned. A billion pounds of the annual Welsh health budget is not being spent properly, according to finance chiefs.
NHS finance directors say they are facing a shortfall in funding of 5% in the assembly government's draft budget. Welsh assembly members have been told that some patients are taking up beds needlessly, while others needed to be in hospital but were not.
They said "difficult choices" affecting staff and services would have to be made if they were to balance the books. Paul Davies, of the All Wales Directors of NHS, said a fifth of the £5bn annual health budget was not used correctly, with "extremely costly" mistakes.
NHS Wales chief executive Paul Williams said staff "remain committed" to managing budgets. The Welsh Assembly Government has been asked to comment.
Paul Davies, chairman of the All Wales Directors of Finance for the NHS, will tell the assembly finance committee that they will receive £41m less than expected in the next financial year. Mr Davies told the assembly finance committee: "Far too many patients end up in the wrong place, either being hospitalised when they shouldn't be, or they stay in hospital too long, or they stay in primary care, and they should be in hospital.
"All these mistakes .... [are] extremely costly, very expensive.
"We believe there is at least 20% that we are not doing appropriately within the total budget, that if we did then we would see that improvement come through.
"There's £1bn that we're not utilising appropriately."
'Difficult choices'
Earlier in written evidence, the finance directors warned that staffing levels and funding for patient care at hospitals throughout Wales will be under "enormous pressure" next year.
They said they were facing a shortfall in funding of 5% in the assembly government's draft budget and "difficult choices" affecting staff and services would have to be made if they were to balance the books.
Mr Davies told the finance committee that they will receive £41m less than expected in the next financial year.
The draft budget proposes a spend of £5.8bn on health and social services.The draft budget proposes a spend of £5.8bn on health and social services.
Mr Davies said although it was an increase of 2.6% on this year, it was "by far the lowest increase received for many years" against "a backdrop of increasing non-avoidable financial pressures".Mr Davies said although it was an increase of 2.6% on this year, it was "by far the lowest increase received for many years" against "a backdrop of increasing non-avoidable financial pressures".
He said the main priority for the NHS was to maintain and improve safe, quality services, "but this becomes increasingly challenging in the context of constrained budgets," he warned.He said the main priority for the NHS was to maintain and improve safe, quality services, "but this becomes increasingly challenging in the context of constrained budgets," he warned.
The scale of the challenge, however, cannot be underestimated Paul Davies, All Wales Directors of Finance, NHS Wales Far too many patients end up in the wrong places. Paul Davies, All Wales Directors of Finance, NHS Wales
"The nationally negotiated pay settlement, increases in demand, costs of new drugs and technologies as well as the requirement to deliver ministerial priorities will place enormous financial pressure on the health service in Wales in 2010-11." "The nationally-negotiated pay settlement, increases in demand, costs of new drugs and technologies as well as the requirement to deliver ministerial priorities will place enormous financial pressure on the health service in Wales in 2010-11."
He said in order to balance the books managers recognised they had to transform the way services were delivered.He said in order to balance the books managers recognised they had to transform the way services were delivered.
"Such wholesale changes will take some time to deliver but it is important that this journey is started immediately.""Such wholesale changes will take some time to deliver but it is important that this journey is started immediately."
He welcomed the chance for hospitals to secure extra money to fund projects leading to increased productivity and efficiency savings in the long run.He welcomed the chance for hospitals to secure extra money to fund projects leading to increased productivity and efficiency savings in the long run.
"The scale of the challenge, however, cannot be underestimated as savings requirements are estimated to be 5-6% for 2010-11," he added."The scale of the challenge, however, cannot be underestimated as savings requirements are estimated to be 5-6% for 2010-11," he added.
NHS finance directors recognise it is a difficult and challenging year and NHS staff remain committed to managing within their budgets Paul Williams, chief executive, NHS WalesNHS finance directors recognise it is a difficult and challenging year and NHS staff remain committed to managing within their budgets Paul Williams, chief executive, NHS Wales
NHS Wales chief executive Paul Williams said: "The NHS has been given significant funding within which to deliver its services. Responding to the earlier comments on the budget shortfall, NHS Wales chief executive Paul Williams said: "The NHS has been given significant funding within which to deliver its services.
"NHS finance directors recognise it is a difficult and challenging year and NHS staff remain committed to managing within their budgets."NHS finance directors recognise it is a difficult and challenging year and NHS staff remain committed to managing within their budgets.
"Halfway through the year a number of the new NHS organisations are recording deficits, but are continuing to take forward efficiency plans to enable them to achieve their financial targets.""Halfway through the year a number of the new NHS organisations are recording deficits, but are continuing to take forward efficiency plans to enable them to achieve their financial targets."
Operating theatresOperating theatres
Nick Bourne, leader of the Welsh Conservatives, said: "This is a damning appraisal of the state of NHS finances in the year ahead. Nick Bourne, leader of the Welsh Conservatives, said the comments about £1bn not being properly spent left the assembly government with serious questions to answer.
"For the sake of patient care, jobs and services, the assembly government cannot afford to ignore warnings such as this." "This is an astonishing admission of waste and an indication of how the Labour-Plaid assembly government's centralised control culture has undermined the work and efficiency of NHS Wales," said Mr Bourne.
Kirsty Williams, leader of the Welsh Liberal Democrats, said it was "shocking" that a fifth of the NHS budget in Wales was not being spent appropriately.
"While we acknowledge that this money is being spent on patient care, it is unnaceptable that £1bn is not being used to maximum effect to benefit patients," she said.
Meanwhile, Health Minister Edwina Hart has announced £5.44m for three new operating theatres in north Wales.Meanwhile, Health Minister Edwina Hart has announced £5.44m for three new operating theatres in north Wales.
The money will help to provide two laparoscopic (keyhole surgery) theatres and a urology day care unit at Ysbyty Glan Clwyd in Rhyl.The money will help to provide two laparoscopic (keyhole surgery) theatres and a urology day care unit at Ysbyty Glan Clwyd in Rhyl.
The extra theatre space is expected to increase capacity on the site by 20% allowing more operations to be performed and helping to reduce waiting times for surgery.The extra theatre space is expected to increase capacity on the site by 20% allowing more operations to be performed and helping to reduce waiting times for surgery.