Financial pressures on the NHS prompt change in escalation status

Welsh Government has today announced that Powys Teaching Health Board has moved from “routine arrangements” to “enhanced monitoring” for planning & finance in the national Joint Escalation and Intervention Arrangements.

The Joint Escalation and Intervention Arrangements are a national process by which Welsh Government works with Audit Wales and Healthcare Inspectorate Wales to review the performance of Health Boards, Trusts and Special Health Authorities in Wales, and to allocate an escalation status in four bands:

• Routine Arrangements (lowest level)
• Enhanced Monitoring
• Targeted Intervention
• Special Measures (highest level

More information about these arrangements is available from the Welsh Government website.

Our focus firmly remains on continuing to work with patients, communities, staff and partners to maintain high quality services and reduce waiting times whilst ensuring we return to a sustainable footing.

This increased escalation status reflects the very challenging situation being faced by the NHS across the country. For example, in his recent report on NHS accounts, the Auditor General Adrian Crompton has highlighted that health revenue funding in the NHS in Wales fell in real terms in 2022-23 at a time when the service continues to face the challenges of tackling backlogs, and responding to immediate pressures and new patterns of demand.

The NHS across the country is facing a very challenging context in terms of finance and planning, and this is very much reflected in our position here in Powys:

• Last year was the first time since 2015 that PTHB did not achieve a break even financial position, ending the year with a deficit of £7m.
• For 2023/24, the plan that we have submitted to Welsh Government will end the year ahead with a £33.5m deficit position.
• Our overall budget is around £400m per year. This means we spend just over £1m every day, but our deficit position means we spend £90,000 every day that we cannot afford.

Our track record of delivery here in Powys gives us confidence that we will come through these challenges, but given rising costs and increasing demand we all need to be part of an open and honest conversation with the public about what the future health and care service looks like to ensure the sustainability of the NHS in Wales.

Dr Carl Cooper, Chair, Powys Teaching Health Board and Hayley Thomas, Interim Chief Executive of Powys Teaching Health Board

Responding to the Welsh Government’s statement on escalation and intervention arrangements, director of the Welsh NHS Confederation Darren Hughes said:

“Today’s announcement demonstrates the scale of the challenge NHS organisations, and in particular health boards, are currently facing.

“It’s not new news that the NHS in Wales is looking at a deficit, but we’re in unchartered territory in terms of the scale of the deficits and the challenges that come with that. NHS organisations that have never, or very rarely, been in a deficit position now have unavoidable deficits ranging from £17m to over £40m per organisation.

“Just like families across Wales, the NHS is dealing with very large increases in its day-to-day costs which are beyond its control – rising energy prices, increased cost of staff recruitment and retention, maintaining their buildings and equipment, food prices, transport costs, post-pandemic costs as well as big increases in the costs of medicines and commissioning social care packages.

“NHS organisations are being asked to deliver more for less, with budgets almost 5 per cent lower in real terms this financial year. We need to maximise the way we use and spend the resources available and focus on achieving the best outcomes for patients, but this will inevitably impact the way services are delivered.

“Addressing the deficits is a top priority for NHS leaders, who are already making difficult decisions about spending priorities and considering how services will need to change with many more tough choices to come. There’s been a mammoth effort already by all staff to make efficiencies and bring down deficits.

“We recognise that public finances across the UK are extremely challenging, but it’s really important that governments don’t make promises to the public about what the NHS will do without sufficiently equipping and funding it to be able to deliver on them. Changes made to one service could lead to higher demand elsewhere, so NHS leaders are assessing the impact of all proposed cuts before making any decisions.

“We can’t lose sight of the fact that this isn’t just about budgets, targets and deficits – it’s about people’s lives and they’re the ones who will be impacted, as well as the staff who do their very best to care for them every day.”

Escalation Status of Health Boards in Wales: