Wales’ health service remains under severe financial strain despite significant uplifts in government funding, with all seven health boards failing their statutory duty to break even over the past three years.
The latest audit of NHS accounts for 2024-25 shows that while overall revenue funding reached £11.57 billion – an increase of £927 million compared with the previous year – financial pressures continue to outstrip investment. The cumulative deficit across health boards has grown from £385 million in 2023-24 to £461 million in 2024-25, raising serious questions about the long-term sustainability of the system.
Although three NHS trusts and two special health authorities met their statutory duties, the repeated breaches by health boards led the Auditor General to formally qualify his opinion. This means boards have legally exceeded their authority to spend.
Financial Losses Beyond the NHS
The pressures come against a backdrop of wider financial losses across the Welsh Government in recent years.
- In 2020-21, Wales lost £155.5 million when it failed to carry forward surplus funds due to account mismanagement and Treasury rules.
- Since Brexit, Wales has missed out on almost £1 billion in structural and agricultural funding that has not been fully replaced by Westminster, despite initial promises.
- Audit reviews since 2015 have highlighted recurring underspends, overspends, and reserve losses, creating ongoing instability.
Critics argue that repeated episodes of mismanagement and shortfalls in central funding have combined to undermine the ability of the Welsh NHS to operate sustainably.
Cost Pressures and Short-Term Fixes
The NHS has made progress in reducing agency staff costs, which fell to £174 million in 2024-25, nearly half the level of two years ago. However, almost 40% of savings achieved last year were one-off measures, raising concerns about the lack of structural, long-term solutions.
Only one health board has secured approval for a three-year integrated plan, with most reverting to one-year financial cycles. Experts warn that this short-term approach prevents strategic investment in areas such as illness prevention, cancer care, and community health services – changes widely regarded as vital for long-term savings and improved patient outcomes.
Political Context
With the next Senedd election due in May 2026, questions are mounting over both the Welsh Government’s handling of health finances and the wider funding model imposed from Westminster.
The combination of repeated losses, reliance on short-term fixes, and ballooning deficits has led to renewed calls for accountability. Without significant reform, both in financial management and structural funding arrangements, Wales’ NHS risks facing deeper crises in the years ahead.
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