Vaughan Gething, Cabinet Secretary for Health, Well-being and Sport
The accounts of all ten NHS Wales organisations for 2016-17 have been audited by the Auditor General for Wales and have been laid before the National Assembly.
This is the third year the accounts have been prepared under the NHS three-year financial regime that was introduced under the NHS Finance (Wales) Act, effective from 1 April, 2014.
All NHS accounts in 2016-17 received a clean ‘true and fair’ audit opinion from the Auditor General for Wales. Six out of ten organisations have complied with the statutory three-year break even duty by operating within their budgets over the first three-year period of assessment from April 2014 to March 2017.
Four of the ten organisations have not achieved their financial duty to break even over three years. Abertawe Bro Morgannwg achieved break even in 2014-15 and 2015-16 but failed to do so in 2016-17; Cardiff and Vale University Health Board failed to do this in 2014-15, and 2016-17 but achieved break even in 2015-16; while Betsi Cadwaladr and Hywel Dda University Health Boards have failed to break even in all three years. Consequently these four organisations have failed to meet their statutory financial duty for the first three-year period, and as a result have received qualified regularity opinions from the Auditor General for Wales on their 2016-17 accounts.
The Welsh Government responded to the financial performance concerns in these four health boards through the NHS escalation framework. Betsi Cadwaladr UHB was placed into special measures in June 2015. Although financial issues were not an explicit reason for placing them into special measures, the Health Boards financial position has been monitored along with the other areas of concern, on which I have provided regular updates to members.
The other three Boards in deficit were placed into targeted intervention in September 2016 and Welsh Government has been working with these organisations to provide challenge and support. This included undertaking financial governance reviews, which have reviewed the governance and decision making processes adopted by the organisations in the development of their financial plans, the governance of their in-year financial performance reporting and engagement with the Board on these matters. These reviews have recently concluded, and we will be considering the lessons to be learned and follow-up action required early in this new financial year.
Additional cash support has continued to be provided when required to all Boards in deficit to enable them to meet their normal cash commitments including payroll expenditure. This cash assistance is repayable in future financial years when appropriate and improved plans are developed and approved under the Act to enable the repayment of deficits.
I look forward to the Auditor General for Wales finalising his audit of the Welsh Government’s overall accounts. I am confident this will demonstrate that the health and social services budget has broken even overall in 2016-17 through the actions that have been taken to manage the deficits incurred by the four health boards in 2016-17.