NORTH WALES: Health board's 'deteriorating' finances

Russell Caldicott, recently appointed interim director of finance at Betsi Cadwaladr University Health Board, gave an update on the health board’s ongoing financial deficit at its meeting this week.

He said: “In terms of our current performance we see a £2.9m deterioration in our position on the back of a £1 million deterioration in April so it’s £3.9m. That deterioration has continued.

“We are now at a cumulative £9.3 million deficit. You can see we’re going beyond a plan that committed more cash resource and having to find that additional cash as well is going to be incredibly challenging for us. It’s a very difficult position.”

Mr Caldicott said pay award increase costs were a contributing factor towards the deficit.

He added: “Every month that becomes more difficult to recover from, every month we delay taking those challenges on board we face a bigger challenge in the remaining months of the calendar year.

“Unfortunately it’s a position that shows we are deteriorating in terms of financial performance, certainly in revenue and there is a real concern for us as we move forwards just in terms of our cash projections.”

The meeting heard that the health board had earmarked £7m just to cover agency costs through June.

Temporary chief executive, Carol Shillabeer, who earlier in the meeting it was announced had agreed to stay on until the end of March next year on secondment from Powys Teaching Health Board, said the deficit was serious and changes will have to be made quickly.

Interim chief executive Carol Shillabeer (Image: BCUHB)

“I think this is a really serious position that we’re in and an escalating position”, she said.

“We’re not alone as a health board, the other health boards in Wales, the NHS in England and Scotland, the same types of financial pressures are being applied but the key issues we’ve got here is that we’ve got a very short window in which to take some escalated action now.

“We know that the cost-of-living, inflationary issues are still very live, the economic picture and public sector finances are not going to improve this year or next and beyond that is not clear.”

She added: “But we’re dealing with this position for the next two years, so we’re going to have to escalate our levels of options and choices here.

“I think that will include reviewing investments we’ve made already or investments that we’d planned to make, maybe defer, reduce, slow or cease.

“So where we can and should do things differently in the organisation, we’re going to need a mechanism for the board in which we can agree some of the principles of how we will be operating.

“I’m very keen to do that in partnership with trade unions, staff, with partners, but we can’t just move from meeting to meeting saying ‘this is looking worse’. We do have to put some escalating actions in.”

Independent board member Clare Budden talked of “hard choices” having to be made but said it was important focus was not taken off long-term plans while dealing with issues in the short term.

Interim chair Dyfed Edwards agreed about the bigger picture, adding: “We also know that there are things that will have a detrimental effect on what we’re trying to deliver for the residents of North Wales, there’s no question about that, that’s where we are.”

In response to a question about the effects of pay awards on health bord budgets, Ms Shillabeer said there was a difficult balance to find.

She said: “It is very clear from all of the literature that the workforce feel worn out and undervalued, and the more workforce gaps you have the more undervalued and worn out the workforce feel.

“We’re stuck in this real challenge here and now we’ve layered on a financial challenge as well which means we must do things differently in order to try and tackle that.”