The number of people waiting over a year for an operation in Wales has gone up 400 per cent since 2013, according to the Royal College of Surgeons.
The leader of the Welsh Conservatives, Andrew Davies, has described the rise as “scandalous”. Health spending is a devolved issue, and is managed by the Labour-led Welsh government.
A number of commentators have expressed concern at the way the Welsh administration has been running the NHS in recent years.
But the amount of money Wales gets to spend on healthcare is set in Westminster, and there’s evidence to suggest that the country loses out financially compared to other parts of the UK.
FactCheck looks at the figures.
Who decides how much money Wales gets to spend on healthcare?
The devolved administrations receive a block grant to spend on devolved policy areas (including healthcare). The grant is set using the “Barnett formula”, which is based on population size.
The idea is that if Westminster ups healthcare funding in England, the Welsh, Scottish and Northern Irish authorities will get an increase in their funding. How much cash they get depends on the size of each country’s population.
The current funding system doesn’t take into account the needs of the population
But the Barnett formula is far from perfect. We spoke to Mark Dayan, Policy and Public Affairs Analyst at the Nuffield Trust. He explained one of the drawbacks of the current system: “the Barnett formula reflects purely population size, there’s no reflection of demographic features. The funding grant was set several decades ago – it’s not doing a good job at reflecting demographic needs.”
What do we mean by demographic needs?
Well, the House of Lords looked into the Barnett formula back in 2009. They proposed that funding should be allocated to the countries of the UK on the basis of need, using indicators like: the age of the population, income levels, the prevalence of ill-health and disability, and local rates of unemployment.
If central government switched to a needs-based funding system, Wales could spend around £180 more per person on healthcare each year.
The Lords report found that Wales in particular loses out in the absence of a needs-based funding system. They said that “at present, the annual adjustments in funding are calculated by reference to population figures. We heard evidence that this fails to recognise the particular needs in Wales and Northern Ireland.”
This makes sense when we consider that Wales has proportionately more people over the age of 65, when compared with the rest of the UK. This increases spending pressures on local NHS services.
Mark Dayan of the Nuffield Trust points out: “at the moment, Wales gets very slightly more money per person than in England, but if you look at needs, it would get significantly more than it does through Barnett and the inherited funding grant.”
In fact, a needs-based allocation of health funding does already exist in the UK. But it’s not used by Westminster to allocate funding to the nations of the UK. It’s used by NHS England and NHS Scotland to allocate funds internally among their own primary care trusts.
England and Scotland use slightly different methods, but the idea is roughly similar: areas that have more elderly people, more children, higher mortality rates and higher economic deprivation will get more money to spend per person.
In 2013, researchers at the University of Stirling looked at what would happen if we applied the funding formulae used internally by the English and Scottish NHS to national funding grants.
They found that according to NHS England’s assessment of needs, the NHS in Wales would need to spend 9.7 more per person than England to meet the needs of the Welsh population.
Using the NHS Scotland formula would see Wales receive 9.5 per cent more per person than England.
How does that compare to the current set-up?
According to the latest Treasury stats, annual health spending per head is £2,127 in Wales and £2,106 in England. That means Wales spends just under one per cent more per head than England.
But remember: the needs of the populations are very different.
Using calculations from the University of Stirling’s research, we estimate that if funding was allocated on the basis of needs (as calculated by NHS England’s needs-based assessment), Welsh health spending per person could go up to £2,310. Under the NHS Scotland needs-based formula, that could go up to £2,306.
Taking an average of these two figures, Welsh health spending per person could go up by around £180 under a needs-based funding system.
So is Welsh Labour off the hook?
Yes and no. It’s clear that the NHS in Wales is subject to disproportionate funding pressures because of the particularly intense healthcare needs of its population. It could do with more money if it’s to meet those needs – and that is something that’s beyond the Welsh government’s control.
However, it’s still the responsibility of devolved administrations to manage the money they receive. Back in January, the Welsh government announced that they would pump an extra £50 million into the NHS to reduce waiting times.
But at the time, Angela Burns, the Welsh Conservative health spokesperson, said that “while extra cash is always welcome, it isn’t just about money. It’s about planning and more effective use of existing resources and cutting down on waste”.
FactCheck verdict
Waiting times for surgery in Wales have risen dramatically in the last four years under Labour. But this doesn’t necessarily tell us whether the Welsh government are mismanaging the NHS.
What we do know is that the way funding is allocated to the devolved administrations fails to account for the needs of the population (e.g. age, deprivation, rates of disability).
Wales particularly suffers from the flaws in the current funding system. We estimate that if the system was reformed to account for these needs, Wales could spend around £180 more per head on healthcare each year.
