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Wednesday, September 25, 2013

Culture of overspending in Welsh health service needs to end

As a member of the Assembly's Finance Committee I will be involved in scrutinising a new Government Bill that will change the requirement on health boards to break even each year and instead insist that they must balance the books over a three year period.

Government Ministers, and to be fair some Assembly Committees have argued that this will help long-term planning and enable the building up of reserves within that accounting period. On the downside, there is the danger that the annual crisis that beset all health boards with instead become a triannual and because it is spread over a longer period, take place on a bigger scale.

Yesterday the Public Accounts Committee heard evidence from the Wales Auditor General that deprecated the way that health boards are run. According to the Western Mail he said that health boards had developed a culture of expectation that they would be “bailed out” by the Welsh Government if they spent beyond their means:

He said: “Year in and year out the Welsh Government, at a midpoint, has given extra funds to the system. We are breaking a mindset and culture that over the years has developed the view that over the years that ‘the funds will arrive’.

“We need to have a much more consistent approach that the budgets are the budgets and those are the ones that should be adhered to. Unless that kind of discipline is brought in from beginning of the year, we will consistently be in a position where the Welsh Government is having to bail out.

“I have certainly heard [it said] ‘if we show we are going to break even we won’t get any extra funds in the course of the year’. It requires that culture to be driven out. There has to actually be a responsibility on the body to live within its budget and the Welsh Government has to be transparent about why it may give that money and the justification for that.”

The Committee report on this issue accused the Welsh Government of sending mixed messages by insisting at the beginning of the last financial year that no extra funding was available, but then providing £92m in additional funding.

And that is the problem. No politician is going to allow a health board to fail to meet its legal duty whilst they are in charge and the penny-counters in the health service know that.

It is a fact that no matter how much money one throws at the health service it will never be enough. That is because we are constantly developing new treatments, new drugs and discovering new diseases. It is also because at some stage in our life we will all need care. Health service finances are built on the assumption that we will not need that care all at once. With an aging population a large part of that assumption is being constantly challenged.

What the Government needs to do with this legislation however is to use it to change the culture of health boards. Ministers and their officials need to be sitting on the shoulders of accountants, making sure that they have a proper three year plan, not three one year plans.
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