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Last Updated: Monday, 2 October 2006, 06:17 GMT 07:17 UK
Q&A: Who runs the NHS in Wales?
As part of BBC Wales' Me and My Health series, Professor Marcus Longley, associate director at the University of Glamorgan's Welsh Institute for Health and Social Care, looks at the structure of the NHS in Wales.

Who decides how much money the NHS in Wales gets, and how it is spent?

Professor Marcus Longley
Marcus Longley says public opinion can bring changes in the NHS
At the national level, the Welsh assembly decides the size of the NHS budget, from within the total allocation it receives from the chancellor.

The NHS is easily Wales' biggest organisation, with 80,000 staff, and a total budget of 4.4bn a year (up by 1.25bn since 2002).

About 80% of this is allocated to the 22 local health boards (LHBs) according to a formula, which gives most money to those parts of Wales with the poorest health. This supports most hospital services.

About 12% goes on GPs, dentists and others in the community. Five per cent is kept back to fund education and training for existing and future staff. The rest goes on various national public health initiatives and to fund research.

At the local level, therefore, the 22 LHBs are key. They use their money to decide what the NHS trusts should provide, make the big decisions about the future of local hospitals, and hold the trusts to account.

The 14 NHS trusts are responsible for the day-to-day running of hospital services, for ambulances, and for staff such as district nurses and midwives.

In practice, the boards' freedom to manoeuvre is circumscribed by, for example:

  • National policy - the Assembly's waiting times targets have to be met
  • National contracts - the national GP contract states what GPs can be expected to do
  • The weight of history - the vast majority of budgets are simply rolled over from year to year.
  • How does change happen in the NHS?

    In part, it is as a result of the assembly making key strategic decisions, and making sure that the LHBs and trusts implement them.

    For example, in 2005 it produced a new strategy - Designed for Life - which sets out various waiting times and other targets, and outlines the wholesale re-design of hospital services which is currently causing so much controversy in north and west Wales.

    University Hospital of Wales
    Hospitals like UHW in Cardiff are managed by NHS trusts
    In part it is the result of technological change and professional innovation.

    New drugs, new ways of providing care, new standards, all demand change from the NHS in Wales as they do from health services anywhere in the world.

    And in part it is about public opinion. This can be direct - plans for west Wales, for example, are now on ice because of public opposition. It can also be indirect - politicians know that every four years they'll find out what people think of their stewardship of the NHS.

    So is NHS decision-making fit for purpose?

    There are several answers to this question. It is relatively efficient - only about four per cent of the total budget goes on management costs.

    It is relatively safe - there are lots of checks and balances to make sure that everyone gets an acceptable standard of care. And the NHS is still a very popular national institution.

    Paradoxically, the recent financial pressures affecting the service may actually be a sign of relatively good management. Despite the pressures locally caused by rapid growth and nationally-negotiated contracts, in Wales they are remarkably small as a percentage of total spend.

    But the NHS does struggle to keep up the pace of change. All that extra investment that has gone in must be matched with newer, better ways of doing things - and the jury's out on whether that is being achieved.

    People must also have confidence that their NHS is being run as it should be - for most of us, the NHS is in effect a monopoly provider, and we will all rely on it at some stage in our lives.

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