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Aneurin Bevan University Health Board, which runs the NHS in Gwent, has overspent by £22.2 million so far this year, despite planned cuts already totalling £40.5m.
The Welsh Government has told health bosses it needs to “go further” to bring overspending down.
At a recent health board meeting, its finance director Rob Holcombe said the end-of-year position was expected to be £47.86m in the red, a slight improvement on the £48.9m ‘best case scenario’ deficit it projected in its annual report.
Why is Caerphilly in Gwent?
Caerphilly County Borough was formed on April 1, 1996, by the merger of the Rhymney Valley district of Mid Glamorgan with the Islwyn borough of Gwent.
Administratively, for local services such as the police and health, the borough now falls under a wider region referred to as Gwent. This comprises the council areas of Caerphilly, Newport, Torfaen, Blaenau Gwent and Monmouthshire.
The revised overspend is still almost £35m greater than a Welsh Government imposed target of a £12m overspend, although Mr Holcombe claimed it was “broadly content” with its financial position.
His report did however remind members the £64.5m in additional funding from the government, first awarded last year, is conditional on it “making progress towards” the £13m figure, and could be “clawed back” – throwing its current financial plans out of the window.
Mr Holcombe said the Welsh Government’s message is to continue its progress “and go further”.
The health board started the current financial year with a three-year financial deficit of £86.3m, the second highest of Welsh NHS bodies. Each health board has a legal obligation to ‘break-even’ over a three-year period.
Next year, 2025/26, the health board expects to have a deficit of £55m, meaning its three-year cumulative rolling deficit is likely to hit almost £153.6m by March 2026.
The £48.9m overspend for this financial year is based on extra funding of £51.8m, plus cuts of £40.5m.
The £22.2m figure represents the health board’s position at the end of August this year. It expects to beat its savings target by £3m due to a better than expected outcome of an arbitration case, and savings related to blood clot medicine Rivaroxaban.
During August the board achieved £3.4m in savings, and over the year to date the figure is £13.3m – out of the planned £40.5m.
Rising medicine costs (from £7.29 to £7.52 per item) and nursing maternity leave cover have been identified as further risks to the health board not achieving its planned overspend.
Patients stuck in hospital is also a cost pressure with 319 occupying beds at the end of August, despite being fit for discharge.
Around a quarter of “blocked bed days” are health-related, 46% due to problems with social care or packages of care meaning people can’t return home. The remaining 29% is down to other reasons including patient/family problems or nursing homes.
Over the year blocked beds are expected to cost the health board £16.1m based on a £150 cost per “bed day”. They also contribute to a surge in bed capacity, which results in increased demand for high cost temporary staff.
Though temporary staff costs are a pressure, the board managed to reduce spending on agency nurses in August because they couldn’t fill the shifts. Around 100 nursing shifts and 350 healthcare support worker shifts not filled. Had they been fully staffed, spending would have increased by another £200,000.
The board is developing a three-year recovery plan as part of an “agreed route map to sustainability”.
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