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NHS Wales faces £700m deficit by 2020, health charity warns

NHS Wales faces £700m deficit by 2020, health charity warns

According to the charity, NHS Wales is “facing the most financially challenging period in its history"
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NHS Wales must deliver at least £700 million of efficiency savings to balance its books by 2019/20, analysis from the Health Foundation finds.

In a new report, The path to sustainability, the charity says the health service in Wales need to deliver savings that amount to almost 10% of current NHS spending. 

According to the charity, NHS Wales is “facing the most financially challenging period in its history".

The report says nearly £300 million of the funding gap will be closed by the UK Government’s 1% cap on annual increases in public sector pay.

However, the charity adds that NHS leaders will need to balance the savings with the risk that continued pay restraint will damage morale and hinder recruitment of NHS staff.

The research suggests that the rest of the funding gap could be met by additional efficiency savings of 1.5% a year, which would be above the UK trend.

If the health service in Wales can navigate through a tough period until 2019/20, the charity says the long-term outlook could be optimistic.

However, this is dependent on the NHS receiving further investment and continuing to make efficiency savings in line with the UK trend of 1% a year.

Future health care needs could be met if Welsh NHS funding rises by 2.2% above inflation each year from 2019/20 to 2030/31.

However, this increase would only maintain current services. Additional funding over and above the 2.2% would be needed to finance major improvements to care quality.

Additional funding could be in demand in the social care sector, with the number of over 65s expected to grow by 28.5% between 2015 and 2030.

This could see pressures on social care rise at a faster rate than for the NHS – at over 4% a year above inflation.

With funding unlikely to rise at the same rate, there is a real risk that the level of unmet need for care services in Wales could increase.

Anita Charlesworth, director of research and economics at the Health Foundation, said: “The next few years will be tough for the NHS in Wales. Immediate and sustained action is needed to protect patient care, but long-term sustainability is possible.

“Tackling the urgent funding pressures facing the Welsh NHS requires an unrelenting focus on improving efficiency. Securing its long-term future also requires increased investment and continued reform so the service meets the changing needs of an ageing population.

“But the health service is not an island – ensuring people can access high quality social care will also be vital to the future of the NHS in Wales.”

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