The Health Foundation today responded to the draft budget for the Welsh Government. Adam Roberts, Head of Economics at the Health Foundation, said:
‘There has been a welcome increase in funding for the NHS in Wales, despite the total budget for the Welsh Government falling. The level of funding set out today will still mean the NHS in Wales will need to find efficiencies of around 0.4% a year for the next two years to keep pace with pressures.
‘Historically the NHS has achieved efficiency growth of 1% a year, and this should remain the minimum target to allow for maximum funding for long term transformation and sustainability.
‘This assumes that the current pay deal for public sector staff continues, but there are growing calls for this to be lifted for NHS workers. Pay is the single greatest cost for the NHS, so any increase will have financial implications. If pay was returned to long-run growth of 2% a year above inflation with no additional funding from government, efficiencies of around 1.8% would be required.
‘This would be a challenging target. Relaxing pay restraint would be a positive move, particularly in the face of mounting workforce pressures. But without additional funding, this would substantially increase the pressure on existing budgets.
‘Over the coming years the NHS in Wales, as in the rest of the UK, will be facing increasing demand and rising costs from new medicines and technology. The focus must be on improving efficiency and securing a sustainable workforce.’
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