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No clean bill of health for Welsh health boards

15 July: Auditor General for Wales Adrian Crompton has qualified the audit reports of four health boards for failing to break even over a three-year period, despite significant increases in funding.

Audit Wales, the independent audit body for the devolved institutions in Wales, has reported that four of the seven health boards in Wales have failed to meet their financial duty to break even over a three-year period.

According to 2019-20 financial statements published in July, there was a £650m increase in revenue spending on health over the period to 2019-20, with the three-year cumulative overspend across the NHS reducing from £411m to £352m. 

The Welsh Government, which is responsible for the NHS in Wales, says this is investment that should result in long-term improvements to the cost-effectiveness of health and care services in Wales.

NHS bodies in Wales reported that they collectively achieved £130m in savings in 2019-20, around £18m less than in 2018-19. Recurrent savings, which are expected to continue into future years, fell substantially: from £125m in 2018-19 to £87m in 2019-20, indicating how challenging it is for NHS Wales to find sustainable savings by making long-term operational changes. 

This does not take account of COVID-19-related spending, which is having a major impact in the current financial year, and the Auditor General for Wales says he will be closely monitoring progress throughout 2020-21 and publishing updates as appropriate.

Rural development grants

In another recent report, Audit Wales outlined problems in the distribution of rural development funds. According to this report, the Welsh Government awarded £53m of rural development grants without ensuring they would deliver value for money. 

Up until 31 August 2019, the Welsh Government had awarded grants of £598m within this programme. Most grants to new projects involved open competition between applicants, which should help ensure that the best projects receive funding. However, £68m was granted through direct applications where officials invited known individuals or organisations to apply without any competition. 

Audit Wales made five recommendations on how value for money could be evidenced in the future, including improving the documenting of decisions taken by Welsh Government officials.

Audit Wales has ‘big role to play’

Commenting on the reports Alison Ring, director for public sector at ICAEW, said: “Scrutinising the public finances is vital to ensuring that there is trust in how public money is used. This will be even more important in 2020-21 given the rapid increase in spending being driven by the coronavirus pandemic.

“Audit Wales has a big role to play in keeping the Welsh Government and public bodies throughout Wales on top of their game in managing public money.”

Martin Warren, regional director for Wales at ICAEW, added: “ICAEW members are well distributed across the public sector in Wales, including the Welsh Government itself as well as NHS Wales, local councils and in education. This includes those ICAEW members and ACA trainees working within Audit Wales under the Auditor General for Wales, who are contributing to the important work of overseeing the work and activities of the Welsh Government on behalf of the Welsh Parliament and the people of Wales. 

“Together they work to make sure there is value delivered for the public funds spent across the public sector in Wales, as well as ensuring they are used ethically and properly.”