Financial standards of the NHS in Wales vary "too much", and some Welsh NHS bodies face serious challenges ahead in sustaining financial balance, according to a report from the Wales Audit Office published today (18 September 2008).
The report says that, while there are "clear signs that the NHS in Wales is improving the way it manages its finances … financial management is not yet able to play its full role in enabling transformation."
The report reflects on three financial periods and shows that the overall financial performance of NHS trusts in 2006–07 improved compared to 2005–06, but the performance of local health boards (LHBs) worsened.
The Audit report says there are still financial challenges to overcome in some parts of Wales, such as meeting cost pressures for continuing healthcare and drug prescribing and the need for some trusts to finalise plans to remain in financial balance.
Key findings include that, up to December 2007, 14 of the 22 LHBs were forecasting that they would exceed their resource limits – some by considerable margins.
The report recommends that local NHS bodies should ensure that staff responsible for managing delegated budgets have appropriate financial management competencies.
It also says the Assembly Government should review the medium-term financial plans of local NHS bodies as an integral part of its financial monitoring regime.
Auditor General for Wales, Jeremy Colman, said: "My latest diagnosis of the financial position of the NHS in Wales is much improved from my last report in 2006.
"But there are still areas for concern and the pace and scale of current changes present additional short-term risks, which need careful managing.
"These changes also present new opportunities for improved financial management, and my recommendations around areas such as financial planning, reviewing and monitoring are designed to encourage NHS bodies in this direction."