Aneurin Bevan University Health Board set for £19.9m overspend

Gwent’s NHS board is on course to finish the financial year £19.9 million in the red rather than breaking even as had been forecast. 

Spending by the Aneurin Bevan University Health Board, which is responsible for health services for 600,000 people across Newport, Caerphilly, Blaenau Gwent, Torfaen and Monmouthshire as well as the area’s hospitals, reached a £10.225m deficit at the end of August. 

The deficit figure, for month five of the financial year, is around 900,000 worse than had been planned for in the board’s medium term plan and has been blamed on rising drug prices, costs for looking after and caring for people with long-term needs and increased staffing costs for mental heath services. 

Rob Holcombe, the board’s director of finance, told its September meeting: “The position is challenging to say the least.” 

The health board’s approved plan for the 2025/26 financial year included savings of £40m intended to reach a balanced position by the end of the financial year in March, 2026 and which it acknowledged had a “high delivery risk” of being achieved and left no room for unforeseen costs. 

Despite the board having already beaten its savings target, by £2.5m, a mid-year financial review identified ongoing increased costs in addition to those already identified in the agreed plan. 

Meeting the Welsh Government’s targets on cancer treatment also accounts for £2m of the increased costs while the Welsh Government hasn’t met the full cost of National Insurance increases, as had been anticipated, costing the board another £2m. 

Mr Holcombe said the board will continue to look for any opportunities to reduce costs but also noted risks remain with the forecasted deficit, which is based on spending being over what has been budgeted for and anticipated. 

But his report for the board stated it doesn’t believe there are actions it can take to drive down the cost pressures and price rises behind the predicted £19m deficit. 

The board had already approved the revised forecast, from a non-recurrent, or not to be expected to be repeated, break-even position for 2025/26, to the deficit position and the report said: “The Health Board will have limited ability to identify further mitigating actions without identification of further funding or cessation or reduction of services.”