North Wales health board could still face £45m shortfall despite government loans being written off

A health board could still be liable for £45m in accrued deficits, despite having all its bail-out loans written off by Welsh Government

The announcement from Health Minister Vaughan Gething last week meant £470m of loans made to health boards, including £149.7m given to Betsi Cadwaladr University Health Board, were erased from the books.

The cash loaned to Betsi was to help meet its historic obligations going back over a number of years.

However it still leaves £45m that will need to be repaid if it fails to break even in the next three-year accounting period up to the financial year ending 2022-2023.

Since 2014 health boards have had three-year periods in which to balance their books, the second ending in March this year.

In all Betsi has racked up £194.7m of deficit since the system began, so news more than three-quarters of it doesn’t need to be repaid was received well by Sue Hill, acting executive director of Finance at BCUHB.

She said: “We welcome this clarification from the Welsh Government which will enable us to focus on our recovery from the unprecedented challenged posed by the Covid-19 pandemic, while planning how we deliver services which are clinically and financially sustainable.

“If we can achieve financial balance for three consecutive years, we will not be required to repay any of the historic deficit.

“We recognise that a major risk to financial balance is the extraordinary level of expenditure the NHS is incurring as a result of the response to the Covid-19 pandemic.”

Betsi anticipates it will receive £134.2m from Welsh Government to help cope with the effects of Covid-19, of which £60m is expected to go on developing and maintaining the region’s three Rainbow Hospitals.

In 2018-19 the board posted a deficit of £42m and in 2017-18 it was £38.8m.

Assuming this year’s accounts are finalised at £40m deficit, that equate to £120.8m over budget in the three year accounting period.

The Welsh Government’s control total is a £35m overspend in any one year.

By Jez Hemming – Local Democracy Reporter