Key points

  • The NHS in Wales must deliver at least £700m of efficiency savings to close the projected funding gap by 2019/20. This amounts to almost 10% of current NHS spending.  
  • Almost half of the funding gap will be closed by the UK government’s public sector pay policy, although there is a risk that continued pay restraint will damage morale and hinder recruitment and retention of NHS staff. The remaining gap could be closed by additional efficiency savings of 1.5% a year. This is above the current UK trend but not unprecedented.
  • The report suggests that, from 2019/20 to 2030/31, future health care needs could be met if Welsh NHS funding rises by 2.2% above inflation each year, and there is continued efficiency growth.
  • Increased funding of this level would maintain current services, but additional funding would be needed to fund any major improvements to the quality of health care.
  • Beyond funding, fiscal sustainability will also require adapting services so they are fit to meet the needs of the future population. Adopting the principles of prudent health care is one way of doing this and the report suggests that this approach would not increase the total cost pressures for the NHS.
  • Adequately funded social care is critical to a sustainable health service. But as the Welsh population ages, pressures on social care are projected to rise at a faster rate than for the NHS. With funding unlikely to rise at the same rate, there is a real risk that the level of unmet need for care services in Wales could increase.
  • To ensure long-term sustainability of the service, the report argues that policymakers and NHS leaders in Wales must take sustained action to secure the long-term future of the service. This requires:
    • increasing funding by at least 2.2% each year from 2019/20 until 2030/31
    • developing a strong workforce policy that ensures adequate numbers of high quality and motivated staff are retained and recruited, despite continued pay restraint
    • investing adequately in a range of public services, particularly social care
    • continuing to make efficiencies and reform health care to meet the population’s changing and growing needs.

This report analyses the demand and cost pressures facing the NHS in Wales up to 2019/20 and in the decade beyond. It finds that the NHS in Wales must deliver at least £700m of efficiency savings to close the projected funding gap by 2019/20.

The report outlines the immediate and sustained actions that will be needed to both address the urgent funding pressures and to secure the long-term future of the service.

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