Spending trends and legislative developments in Wales


By Paul Carey-Kent, Policy Manager, CIPFA

The Health and Integration Board has highlighted the potential value of learning between the UK’s nations as the frameworks for health and social care continue to diverge. In the January newsletter we reported on the delivery plan for Scotland. Now Wales Public Services has published an interesting account of how matters differ there. Structurally, Wales rejected the ‘purchaser-provider’ model in favour of a ‘planned system’ – perhaps pre-figuring the shape towards which the English model is moving. Since 2009, the NHS has operated through seven local health boards – responsible for assessing population needs and organising primary, community, secondary and specialised care – and three specialised trusts.

Variations between England and Wales

That difference isn’t an obvious factor in the contrast of spending patterns between Wales and England, but the Welsh have pursued a more balanced approach to NHS and social care spending than England over the last few years. The result is that spend per head on health is now similar between the two nations, whereas a decade ago Wales spent markedly more; while on the other hand social care spend in Wales has been maintained at a higher level, having not faced the same funding reductions as those in England. Thus, despite a recent funding boost, the Welsh NHS budget has increased by 8% in real terms from 2009 to 2016 as against 10% in England, whereas social care spend has remained flat in Wales against a 7% reduction in England.

That ought to equate to a shift in favour of community and preventive spending – just what the VfM doctor would order. It’s true that an effective interface between health and social care has been seen as crucial, and that delayed discharges haven’t increased in Wales the way they have in England. However, the demographics have mitigated the positive effect for social care: the more rapidly increasing over-65 population in Wales means that spending per older person has fallen by nearly 13% in real terms over those eight years, as by 2015 over 20% of the Welsh were over 65 compared with under 18% of the English, and the gap is widening with the Welsh figures expected to reach 25% by 2020. See the Wales health and social care briefing paper for full details.

The financial challenges seems as sharp in Wales as in England. One response in Wales has been to move to a three year break even approach for the NHS boards. The theory is good: to take a medium term view and increase flexibility to invest up front to achieve savings later. The danger, though, is that the practical effect is just to delay recognition of and action on pressures until the longer term target is formally breached.  

Both nations, then, face their challenges, but the mixture of differences and potential causal factors makes it hard to draw clear-cut transferable lessons. More experience and research is, perhaps, needed.

Welsh Assembly initiatives

Meanwhile, the Welsh Assembly is also pursuing two initiatives which will be worth keeping an eye on inside and outside Wales.

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