We have deep concerns around whether the NHS and social care services will be able to achieve this, given the demand and cost pressures identified and the continuing failure of the majority of health boards to break even. We welcome the £100 million being made available through the transformation fund for pathfinder projects, but we have sought assurance that the use and impact of this fund will be effectively monitored, particularly in terms of it being used to support projects that are genuinely transformative and scalable, and that mental health is given parity with physical health. We have serious concern about the level of funding for primary care. Given the policy focus on shifting care out of hospitals, we would have expected to see a significant increase in the level of spend on primary care, but the evidence that we have seen shows that this is not happening. We believe that this illustrates the challenges facing health boards in achieving service transformation given the ongoing pressures that they face in the acute sector, for example. Given that the direction of travel for services, as set out in ‘A Healthier Wales’ is towards delivery of services to be undertaken in primary and community healthcare, we are very concerned that the proposed funding for primary care will not be sufficient to support this objective.

Turning to the financial position of the health board, as part of last year’s budget scrutiny, we sought to examine in detail the financial position of LHBs in Wales. We reported our disappointment at the time that the ambitions of the National Health Service Finance (Wales) Act 2014 had not been fully realised by all NHS bodies and that four of the seven LHBs reported a deficit in at least one of the preceding three years. A particular concern was that Betsi Cadwaladr and Hywel Dda both reported a deficit in each of the years between 2014-15 and 2016-17.

We note that progress has been made by particular health boards. However, we are disappointed by the continuing inability of a number of health boards to manage their finances and we seek to understand the reasons behind the enduring difficulties in some health boards. We believe it is of crucial importance to understand the extent to which this may be due to management issues at individual health board level, or how much may be due to their funding allocations.

Turning to mental health, the Welsh Government’s detailed draft budget proposals for 2019-20 highlight that mental health is the largest single area of NHS expenditure. The Welsh Government will spend £675 million on mental health services in 2019-20, and an extra £20 million is being provided in this draft budget for mental health services as part of the Welsh Government’s two-year budget agreement with Plaid Cymru. We know that health boards are already spending more on mental health than the ring-fenced allocation. However, we are mindful of the growing demand for mental health services and we’re persuaded by the Welsh NHS Confederation’s suggestion that the level of need for mental health services may be significantly greater than the current levels of spend.

Turning to the health workforce briefly, while systems and services provide a focus for change, it is the workforce that represents the largest asset in delivering care and in delivering the changes needed. We raised concerns with the Cabinet Secretary about the levels of sickness absence within the health workforce, particularly within the ambulance service. We also asked the Cabinet Secretary whether he recognised the disparity in terms of working conditions and pay, and a lack of parity of esteem between social care and healthcare staff. We believe that there's clear disparity between health care and social care sector workers, as has been raised regularly with us by stakeholders, and this is a significant barrier to successful service integration.

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