Page last updated at 07:06 GMT, Friday, 23 October 2009 08:06 UK

NHS 'spends 1bn of budget badly'

Surgeons (Photo posed by models)
Hospital finance directors say 20% of the budget is not spent appropriately

A billion pounds of the annual Welsh health budget is not being spent properly, according to finance chiefs.

Welsh assembly members have been told that some patients are taking up beds needlessly, while others needed to be in hospital but were not.

Paul Davies, of the All Wales Directors of NHS, said a fifth of the £5bn annual health budget was not used correctly, with "extremely costly" mistakes.

The assembly government said health boards should live within their means.

Mr Davies told the assembly finance committee: "Far too many patients end up in the wrong place, either being hospitalised when they shouldn't be, or they stay in hospital too long, or they stay in primary care, and they should be in hospital.

"All these mistakes... [are] extremely costly, very expensive.

"We believe there is at least 20% that we are not doing appropriately within the total budget, that if we did then we would see that improvement come through.

"There's £1bn that we're not utilising appropriately."

'Difficult choices'

Earlier in written evidence, the finance directors warned that staffing levels and funding for patient care at hospitals throughout Wales will be under "enormous pressure" next year.

They said they were facing a shortfall in funding of 5% in the assembly government's draft budget and "difficult choices" affecting staff and services would have to be made if they were to balance the books.

Mr Davies told the finance committee that they will receive £41m less than expected in the next financial year.

The draft budget proposes a spend of £5.8bn on health and social services.

Mr Davies said although it was an increase of 2.6% on this year, it was "by far the lowest increase received for many years" against "a backdrop of increasing non-avoidable financial pressures".

He said the main priority for the NHS was to maintain and improve safe, quality services, "but this becomes increasingly challenging in the context of constrained budgets," he warned.

He welcomed the chance for hospitals to secure extra money to fund projects leading to increased productivity and efficiency savings in the long run.

NHS finance directors recognise it is a difficult and challenging year and NHS staff remain committed to managing within their budgets
Paul Williams, chief executive, NHS Wales

Responding to the earlier comments on the budget shortfall, NHS Wales chief executive Paul Williams said: "The NHS has been given significant funding within which to deliver its services.

"NHS finance directors recognise it is a difficult and challenging year and NHS staff remain committed to managing within their budgets.

"Halfway through the year a number of the new NHS organisations are recording deficits, but are continuing to take forward efficiency plans to enable them to achieve their financial targets."

Operating theatres

Nick Bourne, leader of the Welsh Conservatives, said the comments about £1bn not being properly spent left the assembly government with serious questions to answer.

"This is an astonishing admission of waste and an indication of how the Labour-Plaid assembly government's centralised control culture has undermined the work and efficiency of NHS Wales," he said.

Kirsty Williams, leader of the Welsh Liberal Democrats, said it was "shocking" that a fifth of the NHS budget in Wales was not being spent appropriately.

"While we acknowledge that this money is being spent on patient care, it is unacceptable that £1bn is not being used to maximum effect to benefit patients," she said.

A Welsh Assembly Government spokesperson said: "Health Boards have significant budgets within which to deliver their services and must live within their means.

"It is up to the management of each individual organisation to ensure that money is spent efficiently and effectively.

"Should they identify any funding that is not being used appropriately they should take steps to address this immediately."

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