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. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

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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 ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

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