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The NHS in Wales must deliver at least £700m of efficiency savings to close the projected funding gap by 2019/20, finds new analysis published today by independent charity the Health Foundation. This amounts to almost 10% of current NHS spending.  

Nearly £300m of the funding gap will be closed by the UK Government’s 1% cap on annual increases in public sector pay, though NHS leaders will need to manage the risk that continued pay restraint will damage morale and hinder recruitment and retention of NHS staff. The remainder could be met by additional efficiency savings of 1.5% a year, which would be above the UK trend but not unprecedented.

If the health service in Wales can navigate this tough period until 2019/20, the long-term outlook could be optimistic. But the long-term future of the NHS is dependent on the NHS receiving further investment and continuing to make efficiency savings in line with the UK trend of 1% a year.

The Health Foundation’s analysis shows future health care needs could be met if Welsh NHS funding rises by 2.2% above inflation each year from 2019/20 to 2030/31. This funding rise is significantly higher than recent increases of 0.6% a year for the UK NHS and 0.1% a year for the NHS in Wales, but is in line with estimates of the long-term trend in UK economic growth. However, the decision to leave the EU has increased uncertainty about the economic outlook.

Increased funding of this level would maintain current services, but additional funding over and above the 2.2% annual increases would be needed to fund any major improvements to the quality of health care. 

Adequately funded social care is critical to a sustainable health service. But as the Welsh population ages – with the number of over 65s expected to grow by 28.5% between 2015 and 2030 – pressures on social care are projected to rise at a faster rate than for the NHS – at over 4% a year above inflation. 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.

The path to sustainability: Funding projections for the NHS in Wales to 2019/20 and 2030/31, analyses the demand and cost pressures facing the NHS up to 2019/20 and in the decade beyond. It finds that immediate and sustained action will be needed to both address the urgent funding pressures facing the service and secure the long-term future of the NHS in Wales.

As well as addressing the immediate priorities, in summary, policymakers and NHS leaders 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.

Anita Charlesworth, Director of Research and Economics at the Health Foundation, said:

'The next few years will be tough for the NHS in Wales. Immediate and sustained action is needed to protect patient care, but long-term sustainability is possible.

'Tackling the urgent funding pressures facing the Welsh NHS requires an unrelenting focus on improving efficiency. Securing its long-term future also requires increased investment and continued reform so the service meets the changing needs of an ageing population.

'But the health service is not an island – ensuring people can access high quality social care will also be vital to the future of the NHS in Wales.'

Media contact

Jenny Rushforth, Media Manager (interim)
020 7257 8047

Liza McAlonan, Senior External Affairs Manager
020 7257 2099

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