COVID-19 has required a huge response from NHS Wales, requiring more resources in many areas like staffing, equipment, drugs, IT equipment and services. At the halfway point in this extraordinary year, NHS bodies reported that the total net cost of COVID-19 related activity was £501 million. 

Two key areas of spend were personal protective equipment (£130 million) and staffing (£109 million), with bodies employing a mixture of overtime, agency staff, students and returners. Major expenditure projects were the setting up and running of field hospitals (£122 million) and the Test, Trace, Protect programme (£30 million). As at September the Welsh Government had allocated £469 million of funding to NHS bodies for COVID-19 related costs.

These costs and overall financial positions are set out in our new data tool published today.

As well as direct costs, COVID-19 has impacted normal NHS services, and therefore finances, in a variety of ways. Understandably NHS bodies have struggled to make savings and forecast £72 million less than they expected. However, this is offset by a reduction in costs of £100 million due to delayed activity and paused investment.

Positively, despite the pandemic, the overall financial position of NHS Wales is stable compared to last year, assuming that the Welsh Government broadly funds COVID-19 related costs. NHS bodies report a total mid-year deficit of £43 million, with a year-end forecast deficit of £91 million. These positions show little change from last year where the mid-year and year-end deficits were £46 million and £89 million respectively.

As was the case last year, three NHS bodies are forecasting a deficit. Whilst Hywel Dda’ UHB’s position has improved and Betsi Cadwaladr UHB’s looks to be largely similar to last year, Swansea Bay UHB’s position continues to deteriorate. [Since these figures were reported last month, the Welsh Government has announced a package of strategic assistance funding for Betsi Cadwaladr UHB which includes £40 million to cover the projected deficit for the current year].

Notes to Editors:

• This data tool highlights spending in NHS Wales compared with last year, as well as the expenditure due to COVID-19 for each NHS body up to September 2020.
• Audit Wales is currently carrying out value for money reviews of aspects of the COVID-19 spend. We are looking at how well public bodies are responding to the challenges of delivering the Test, Trace, Protect (TTP) programme. We are also reviewing the procurement and supply of personal protective equipment (PPE).
• Throughout the pandemic Audit Wales has been identifying and sharing good practice in its COVID-19 Learning Project.
• On 3.11.2020 the Minister for Health and Social Care made a plenary statement to the Senedd in which he set out a programme of strategic assistance for Betsi Cadwaladr UHB which comprised of £40m to cover the in-year deficit, £30m to support unscheduled and planned care, and £12m to support performance improvement and implementation of the UHB’s mental health strategy
• The Auditor General is the independent statutory external auditor of the devolved Welsh public sector. He is responsible for the annual audit of the majority of the public money spent in Wales, including the £20 billion of funds that are voted on annually by the Welsh Parliament. Elements of this funding are passed by the Welsh Government to the NHS in Wales (over £8 billion) and to local government (over £4 billion).
• The audit independence of the Auditor General is of paramount importance. He is appointed by the Queen, and his audit work is not subject to direction or control by the Welsh Parliament or government. 
• The Wales Audit Office (WAO) is a corporate body consisting of a nine member statutory Board which employs staff and provides other resources to the Auditor General, who is also the Board’s Chief Executive and Accounting Officer. The Board monitors and advises the Auditor General, regarding the exercise of his functions.
• Audit Wales is the umbrella name for the Auditor General for Wales and the Wales Audit Office. Audit Wales is a registered trademark, but it is not a legal entity in itself.