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Local health boards bailouts 'unsustainable' - Auditor General | Local health boards bailouts 'unsustainable' - Auditor General |
(about 1 hour later) | |
By Toby Mason Political reporter, BBC Wales | By Toby Mason Political reporter, BBC Wales |
A finance watchdog has warned that £24m in cash bailouts given to four Welsh local health boards (LHBs) are "unsustainable". | A finance watchdog has warned that £24m in cash bailouts given to four Welsh local health boards (LHBs) are "unsustainable". |
Aneurin Bevan, Cwm Taf, Cardiff and Vale and Powys Teaching boards received £24m in Welsh government loans in May. | Aneurin Bevan, Cwm Taf, Cardiff and Vale and Powys Teaching boards received £24m in Welsh government loans in May. |
Auditor general Huw Vaughan Thomas said that as a result the LHBs now faced larger deficits to make up this year. | Auditor general Huw Vaughan Thomas said that as a result the LHBs now faced larger deficits to make up this year. |
The Welsh government has denied that the money amounted to a bailout and has ordered the LHBs to pay it back. | The Welsh government has denied that the money amounted to a bailout and has ordered the LHBs to pay it back. |
It has also said the boards face an inquiry into their savings plans. | It has also said the boards face an inquiry into their savings plans. |
Mr Thomas said that without the emergency loans the boards in questions would have failed in their legal duty to break even at the end of the last financial year. | Mr Thomas said that without the emergency loans the boards in questions would have failed in their legal duty to break even at the end of the last financial year. |
He also revealed the extent of the funding gap faced by each of the four boards in this financial year: | He also revealed the extent of the funding gap faced by each of the four boards in this financial year: |
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"The 2011-12 financial year presented every health board in Wales with significant financial challenges because of the downward pressure on funding and the continuing upward pressure on service demand," said Mr Thomas. | "The 2011-12 financial year presented every health board in Wales with significant financial challenges because of the downward pressure on funding and the continuing upward pressure on service demand," said Mr Thomas. |
"In my view, the historical pattern of the Welsh government providing health boards with additional funding in year to manage deficits is not sustainable. | "In my view, the historical pattern of the Welsh government providing health boards with additional funding in year to manage deficits is not sustainable. |
"That said, there are positive signs that the NHS in Wales is prepared to take the tough choices needed to deliver long-term change, although clearly it is a very challenging agenda." | "That said, there are positive signs that the NHS in Wales is prepared to take the tough choices needed to deliver long-term change, although clearly it is a very challenging agenda." |
Mr Thomas said he would be shortly publishing his Health Finances report, which would provide a more detailed assessment of the financial position across NHS bodies and the financial challenges that the NHS in Wales faces. | Mr Thomas said he would be shortly publishing his Health Finances report, which would provide a more detailed assessment of the financial position across NHS bodies and the financial challenges that the NHS in Wales faces. |
A Welsh government said the Wales Audit Office recognises the achievement of NHS organisations in meeting their financial targets and that ministers had taken a "prudent course of action" to support them. | |
"It is important to note that the additional funding was not a bailout," said a spokesman. | |
"The health boards were allowed to draw down a small percentage (0.2%) of the future year's funding in order to provide some flexibility to manage their finances across the financial year end. | |
"As a condition of this flexibility, an external financial review of these organisations' financial plans has been commissioned. | |
"We are investing more than 43 per cent of the total Welsh government budget in health and social services - despite significant cuts to our budget by the UK Government." |