A financial health check – have local health boards and NHS Trusts in Wales met their financial duties?

Darllenwch yr erthygl yma yn Gymraeg | View this post in Welsh

The annual accounts for 2016-17 of National Health Service (NHS) bodies in Wales are the first to report performance against the first statutory financial duty introduced by the National Health Service Finance (Wales) Act 2014.

The annual accounts for 2016-17 for the seven Local Health Boards (LHBs) and three NHS Trusts in Wales were laid by the Auditor General for Wales at the National Assembly for Wales on 9 June 2017.

What are the statutory financial duties?

Under the National Health Service (Wales) Act 2006, each LHB in Wales was required to ensure that the use of its resources in a financial year did not exceed the spending limits set for it in relation to that year by Welsh Ministers.

On 1 April 2014, the National Health Service Finance (Wales) Act 2014 amended the National Health Service (Wales) Act 2006, replacing the duty to balance the books each and every year with a requirement on LHBs to manage their resources within approved limits over a three-year rolling period. This is known as the first statutory financial duty.   It was envisaged that this change in requirement would give LHBs in Wales the flexibility needed to enable more long-term service, financial and workforce planning, as well as helping to ensure the sustainable transformation of healthcare services.

Financial planning in response to the 2014 Act is underpinned by the second statutory duty, which requires that each LHB prepares and has approved by Welsh Ministers a rolling three-year Integrated Medium Term Plan (IMTP).

Welsh Health Circular WHC/2016/054 clarified the statutory financial duties of NHS bodies in Wales and confirmed that, while the change of legislation introduced by the National Health Service Finance (Wales) Act 2014 related to LHBs, the two financial duties also applied to Welsh NHS Trusts.

How will performance against the first financial duty be measured?

Schedule 9 of the National Health Service (Wales) Act 2006 requires LHBs and NHS Trusts to prepare annual accounts. Section 61 of the Public Audit (Wales) Act 2004 requires that these annual accounts are examined and certified by the Auditor General for Wales, who is also responsible for laying a copy of the certified accounts before the National Assembly for Wales.   The annual accounts of LHBs and NHS Trusts report their performance against the two financial duties.

Have LHBs and NHS Trusts met the first financial duty?

The first three-year period under the first financial duty ran from 2014-15 to 2016-17.  Performance against this duty is assessed for the first time in 2016-17 and reported in the annual accounts for 2016-17.

All NHS trusts in Wales met the first statutory duty by balancing their books. However, this was not the case for all LHBs. Only three LHBs reported that they had met the first statutory financial duty by operating within their revenue spending limit over the three-year period 2014-15 to 2016-17. The remaining four LHBs did not meet the first duty, reporting an  overspend over the three years 2014-15 to 2016-17.  The aggregate position for all LHBs for the three-year period to 2016-17 was a net overspend of £253 million. The reported position against the revenue spending limit for each LHB is shown below:

All seven LHBs stayed within their limits for capital spending over the three-year period 2014-15 to 2016-17.

Have LHBs met the second financial duty?

The annual accounts for NHS bodies in Wales from 2014-15 onwards report whether LHBs and NHS Trusts have met the second financial duty.  The performance is summarised below:

A number of these NHS bodies, whilst not having had a three year IMTP approved, have submitted a one-year plan.

What is the impact of the reported deficits?

Paragraph 22, Enclosure 1 of Welsh Health Circular WHC/2016/054 notes that:

Failure to achieve the first financial duty is viewed as a serious matter by the Welsh Government and will be considered in accordance with the NHS Wales Delivery Framework included annually in the IMTP guidance and the escalation and intervention arrangements in the NHS in Wales.

In a written statement on 9 June 2017, the Cabinet Secretary for Health, Wellbeing and Sport, Vaughan Gething AM, set out how the Welsh Government had responded to the financial performance concerns in the four LHBs that reported an overspend in the three-year period 2014-15 to 2016-17. This included monitoring of their financial performance and undertaking financial governance reviews.   The Cabinet Secretary noted that “these reviews have recently concluded, and we will be considering the lessons to be learned and follow-up action required early in this financial year”.

The Cabinet Secretary also reported that:

Additional cash support has continued to be provided when required to all Boards in deficit to enable them to meet their normal cash commitments including payroll expenditure. This cash assistance is repayable in future financial years when appropriate and improved plans are developed and approved under the Act to enable the repayment of deficits.

The requirement to repay the cash assistance and overspends will add to existing financial pressures on LHBs in the short and long term.   The first financial duty is to be assessed on a rolling three-year period.  Therefore, any overspends reported for 2015-16 and 2016-17 will be assessed next year with LHB’s financial performance in 2017-18.    The value of the total overspend reported by four LHBs for 2015-16 and 2016-17 is £198 million.

NHS Wales is facing long term funding and sustainability pressures including an increasingly ageing population with increased morbidity, a growing rate of obesity and related conditions and developments in technology leading to more complex treatments coming on line.

A number of recent reports have highlighted the pressures facing healthcare in Wales. The Health Foundation report The path to sustainability: Funding projections for the NHS in Wales to 2019/20 and 2030/31 (October 2016) stated that the NHS in Wales is “facing the most financially challenging period in its history” and the savings needed are “extremely challenging”. The report set out that NHS Wales needed additional funding, but also improved efficiency and services adapted to meet changing patient needs.

Similarly, the Public Policy Institute for Wales report Efficiency and the NHS Wales Funding Gap (October 2016) identified the need for improved efficiency and service change, but also for a more strategic and sustained national approach to improving efficiency and supporting change. The Welsh NHS Confederation have also highlighted the financial pressures facing NHS Wales and argued that there will need to be some difficult choices made on future services and priorities in an environment where finances will continue to be extremely tight.

The Cabinet Secretary’s written statement of 9 June 2017 reports that he is confident that the health and social services budget has broken even overall in 2016-17. At the same time, the evidence suggests that ongoing and future financial challenges remain.


Article by Dr Paul Worthington and Joanne McCarthy, National Assembly for Wales Research Service.

National Assembly Committee to investigate the pace of change in Primary Care

Darllenwch yr erthygl yma yn Gymraeg | View this post in Welsh

The British Medical Association (BMA) Wales has previously accused Welsh Health Boards of ‘playing lip service to GP cluster networks’, stating clusters lacked the support and resources to do the job. What are GP cluster networks, why are they important and what has been the pace of change?

The National Assembly’s Health, Social Care and Sport Committee will today, be holding their first oral evidence session on this issue.

Keep Reading

Getting there on time? Evaluating the Welsh Ambulance Services’ Clinical Response Model

24 February 2017

Article by Paul Worthington, National Assembly for Wales Research Service

Darllenwch yr erthygl yma yn Gymraeg | View this post in Welsh

Ambulance driving along a road

Background to the new clinical response model

Ambulance services in Wales have seen significant and recent change. In April 2013 the Strategic Review of Welsh Ambulance Services (the McClelland review) set out a number of recommendations for improving services, including proposals for new ways of monitoring performance on ambulance response times.

Following on from the McClelland review, from 1 October 2015 Wales Ambulance Services NHS Trust (WAST) implemented a new clinical response model for a 12 month pilot period, which was later extended for an additional 6 months. It was intended that during this trial, only the most serious calls, categorised as Red (immediately life-threatening), have had a response time target. All other calls would receive an appropriate response, either face-to-face or telephone assessment, based on clinical need. The new model has three categories of calls:

  • Red: Immediately life-threatening (someone is in imminent danger of death, such as a cardiac arrest). The target is for 65% of emergency responses to arrive within 8 minutes;
  • Amber: Serious but not immediately life-threatening (patients who need treatment delivered on the scene and may then need to be taken to hospital);
  • Green: Non urgent (can often be managed by other health services) and clinical telephone assessment.

The new clinical response model has also been supported by the development of a series of Ambulance Quality Indicators (AQI), which are published on a quarterly basis and contain a more detailed set of performance measures, including patient experience and clinical outcomes.

Performance against the new targets

The most recent statistics on ambulance response times published by the Welsh Government are for January 2017; Table 1 below shows the trends and Table 2 sets out the figures for January 2017 by Local Health Board area:

Table 1: Average red calls per day, and the percentage arriving at the scene within 8 minutes, Wales

chart8

Table 2: Emergency ambulance responses in Wales to red calls, January 2017

table-2

The performance data for January 2017 also shows that:

  • There were 39,864 emergency calls, an average of 1,286 per day, 4.3% down on the daily average for December 2016.
  • Of the total, 1,980 (5.0%) were red, 26,456 (66.4%) were amber and 11,428 (28.7%) were green.
  • 75.4% of emergency responses to red calls arrived within 8 minutes, above the target of 65%, but down from 75.8% in December 2016.
  • Performance ranged from 66.2% in Powys to 79.5% in Cardiff & Vale.

Ambulance services inquiries during the Fourth Assembly

In 2015 the Fourth Assembly’s Health and Social Care Committee undertook a short inquiry into the performance of Welsh ambulance services; later in the same year the Committee held additional sessions to examine what progress had been made in response to its original recommendations. This was shortly after the pilot of the new clinical response model had commenced.

As a result of the follow-up inquiries, the Committee wrote to Welsh Government welcoming the fact that the all-Wales target for emergency response times had been met for the first month of new trial model. However, the Committee was concerned that significant regional variations persisted and stated that it would like to see these addressed as a matter of priority and that it expected to see sustained progress in relation to response times at the local and national level.

In his response, the Deputy Minister for Health welcomed the Committee’s recognition of the progress achieved since the initial 2015 inquiry and stated that:

I am proud that we took a step forward for patients by implementing a clinical response model pilot intended to prioritise patients who need an immediate clinical intervention. The pilot is designed to enable ambulance clinicians and resources to be despatched appropriately based on clinical need.

The response also noted the progress made month-on-month against the targets and the publication in January 2016 of the first set of the new AQIs. The Deputy Minister also noted in further correspondence to the Committee that:

During the year-long clinical response model pilot, the AQIs will be published quarterly to allow a clearer understanding of trends and the impact of seasonal variation, sitting alongside the monthly publication of ‘Red’ response times. I can only re-iterate that the way we are sharing key information on ambulance services in Wales makes us the most transparent country in the UK and among the most transparent worldwide.

Review of the clinical response model

The Cabinet Secretary for Health, Wellbeing and Sport set out in a Ministerial Statement in September 2016 that the final evaluation report of the clinical response model was due in December 2016 and that he would make a final decision on the future of the pilot by the end of March 2017.

An interim report on the model received by the Emergency Ambulance Services Committee (EASC) in September 2016 had identified no significant areas of concern. The EASC has also received an update on the draft final evaluation report which indicates that:

…the removal of time based targets for the majority of calls has allowed for more efficient dispatching of ambulance resources, increased opportunities for hear and treat; and supported timely responses to patients with the greatest clinical need.

The EASC was due to have sight of the final evaluation report in January 2017, prior to its submission to the Cabinet Secretary for Health Wellbeing and Sport, who is due to make a statement regarding the evaluation to Plenary on 28 February 2017.

Image Source: Image from Flickr by Diluvienne. Licensed under Creative Commons.

Well-prepared? Dealing with 2016-17 winter pressures in Welsh health and social care services

View this post in Welsh | Darllenwch yr erthygl yma yn Gymraeg

Winter is always a busy time for health and social services, and there has been recent coverage of the pressures on these services, both in Wales and across the UK. Building on the work done during the Fourth Assembly, in Autumn 2016 the Health, Social Care and Sport Committee undertook an inquiry into how well prepared health and social care services in Wales were for winter 2016/17. A Plenary meeting of the Assembly’s on 1 February will be discussing the report on winter preparedness which was published by the Committee in December 2016.

Terms of reference for the inquiry

Ambulance driving through a street which has heavy snow on the pavements and part of the road.

Image from Flickr by Chris Sampson. Licensed under the Creative Commons

In seeking assurance that the Welsh NHS was equipped to deal with pressures on unscheduled care services during the coming winter, the Committee’s inquiry considered:

  • the current pressures facing unscheduled care services, and how well prepared the Welsh NHS and social services were for winter 2016/17;
  • whether there was sufficient progress in the Fourth Assembly in alleviating pressures on unscheduled care through integrated winter planning across health, social and ambulance services, and lessons learned; and
  • the actions needed to produce sustainable improvements to urgent and emergency care services, and the whole system, ensuring the Welsh NHS builds resilience to seasonal demand and to improve the position for the future.

The terms of reference included a focus on patient flow (including primary care out of hours, emergency ambulance services, Accident and Emergency (A&E) departments, and delayed transfers of care from hospital).

Evidence gathering

The Committee consulted on this topic – the responses have been published – and held a number of sessions where it heard evidence from a range of professional bodies and stakeholder organisations including local health boards, social services and representatives of domiciliary and care home providers.

A number of key themes emerged from the evidence the Committee received and heard:

  • Service integration: there was scope for better joint planning and delivery of services between health and social care, and there was limited involvement of the independent sector;
  • Demand: there are spikes in activity during the winter, but also significant and growing pressures all year round, driven especially by an ageing and frailer population – many of who have a number of complex needs. In addition, there are growing numbers of people with chronic conditions needing greater support from primary, community and hospital services. There was also evidence of increased numbers of children needing care for respiratory problems during the winter months;
  • Service capacity: concerns about the capacity available to meet this demand across health and social care, with pressure points including primary and community care, hospital beds and increasing concerns about the domiciliary and care home sector;
  • Workforce: difficulties in recruiting and retaining sufficient GP and hospital doctors, nurses and staff for domiciliary and care homes;
  • Delayed discharges: there is still a need to ensure people are able to be discharged safely, promptly and with the right support in place when they no longer need hospital care;
  • New models of care: there were calls for the development of new service models in primary and community care to avoid hospital admission, and different approaches to A&E services, potentially including primary care involvement and a possible role for ‘front-door’ physicians;
  • Learning and reviewing: The Committee heard evidence of positive developments in a number of areas, including ambulance services and schemes supported by the Intermediate Care Fund (ICF). However, there was a clear emphasis on the need to ensure lessons of good practice were more widely shared and adopted. Evidence also suggested potential for improved working in some areas, including in the flu vaccine programme, where uptake amongst staff remained low and greater clarity was needed on working arrangements in primary care.

The Cabinet Secretary and Minister provided written evidence to the Committee highlighting details of plans being put in place to relieve pressure on unscheduled care services and to deal with the winter season. This highlighted that planning had been undertaken –starting earlier than in previous years – at national and local level, involving local health boards, social services, the Welsh Ambulance service and others. At the same time, the Cabinet Secretary acknowledged to the Committee that “I think we’re as well-prepared as we can be, but that does not mean that the system is in a perfect shape and there is not further improvement that we would expect to make”.

The Committee’s recommendations

The Committee’s report set out a number of conclusions and recommendations to the Cabinet Secretary for Health Wellbeing and Sport and the Minister:

  • Securing greater integration of health and social care sectors should be a key priority for Welsh Government;
  • Options should be explored for enabling more effective working arrangements between GPs and pharmacists in national preventative initiatives such as the flu vaccination;
  • The Cabinet Secretary should ensure arrangements are in place to ensure that lessons learnt from effective services and Welsh Government-funded schemes are shared and learnt from;
  • The Cabinet Secretary should report back to the Committee on what the additional £50 million invested has achieved;
  • Research should be reviewed or commissioned into the effectiveness of primary care co-location in A&E departments;
  • Publication of market analysis of domiciliary and care home services, to provide a clear picture of the capacity and resilience of the sector;
  • Urgent consideration of the need for improved training, skills development and supervision across health and social care;
  • There should be clarity about long term funding of successful schemes financed by the ICF, details made available of how 2017/18 ICF funding will be used and what the expected impact will be.

Article by Paul Worthington, National Assembly for Wales Research Service.