Public Accounts and Public Administration Committee

Hello, Rob Holcombe, finance director for Aneurin Bevan University Health Board.

I'm Paul Mears, chief executive of Cwm Taf Morgannwg Health Board.

Thank you. I'd like to remind everyone again that the meeting is bilingual, and the headsets provide simultaneous translation from Welsh to English on channel 1 and sound amplification on channel 0. So, just a brief word about how we're going to conduct this session. We've got a number of areas that we want to cover, so we'll be directing questions to particular witnesses. We may not ask all of you all of the questions, to avoid length, and if I could ask you to avoid lengthy answers so that we can get through the material we would like to get to, please, that would be very helpful.

So, I'm going to kick off with the first question. The three-year financial regime was introduced to allow health boards to plan over the longer term and support sustainable transformation, yet six of the seven health boards failed both statutory financial duties in 2025-26. From your perspective, has the system worked as it was intended to, and if not, why not? I'd like to ask Mr Mears, first, to answer that one.

Thank you. As you say, we all have the statutory duty for a three-year balanced position, and it's something I know that colleagues, including colleagues in my organisation, take very seriously. Obviously, the challenges we have and face in the NHS are significant and well understood, I'm sure, by many Members on the committee. But I think everyone has an ambition to deliver the financial plans that they are expected to deliver, and those are obviously negotiated through with Welsh Government on an annual basis. So, whilst the financial duty covers a three-year period, our integrated medium-term plan planning process also covers a three-year period, but there's obviously a very big focus to make sure that we deliver also on an in-year position of balance or the particular agreed plan with Welsh Government for that particular year. So, it's absolutely a focus for effort for all health boards I know, and, if I look at my organisation, it's something we've had a real concerted effort to deliver on. It was positive that we were able to deliver the three-year financial duty—for the first time in a while, but it has been delivered. But it is a challenge for every organisation, and every organisation is in different situations and has different circumstances around them, which can often lead to the variance you may see.

Thank you very much. Mr Kloer.

Diolch, Gadeirydd. Thank you. It's obviously an important statutory duty, because the NHS spends a large amount of public sector money, and it reduces the choices for Government spend on other important activities that improve health and well-being. Clearly, it's something that our organisation puts importance on. As Mr Mears has said, we negotiate our approach with Government. I think, in the preceding two years, we've made progress towards meeting the financial statutory duty. We saw improvements in our finances. I think the other part of the statutory duty is that it is linked to the accountability and escalation framework, where support and interventions are able to be applied to health boards. When I consider the support that we are receiving at the moment, that's an important part of the statutory duty and the accountability framework when we put them together.

Thank you very much. And finally for this particular question, Mr Hopgood.

I think the flexibility that is there is helpful, but the reality is that we have to balance quality outcomes, performance, workforce and finance. That is challenging. As Paul has alluded to, those challenges facing the NHS are well known in terms of increasing growth, increasing demand, inflation. So, that balance between delivering against those four pillars, those four objectives, means that just finance in isolation can be challenging.

Okay. Thank you. And my second question, before I move on to the other members of the committee—I'm going to ask this directly to Mr Mears to start off with, but I will be coming to the others as well. You're operating essentially within the same NHS framework as the other health boards, but Cwm Taf is the only health board to have met both statutory financial duties in this year. What are the two or three things that you're doing differently that have made the biggest difference?

So, as we described, we have a very clear planning process nationally that we work with colleagues in Welsh Government on. In my organisation, that process is then replicated within the organisation, where we sit down with our clinical services teams and describe the challenge for the next year in terms of what financial envelope we have available to us, and we ask them to come up with plans of how they think they can deliver their service obligations within the envelope of resource we have available. So, we've got a really clear accountability framework that we sit within within the organisation, and expectations to our teams that we have to try and deliver balance. And it's always a tricky one, because, obviously, there's always more that we could be spending money on if we had more resources, but this process is about having to make choices about things and balancing performance, balancing quality and balancing financial performance. So, I think, for us, that accountability and holding people to account and monitoring that very closely through the year is really important.

I think setting an expectation that delivering all of our obligations is important, not just quality and safety, but money, is an important part of that agenda. And I think, also, being able to have honest and open dialogue with our teams and our board particularly around the choices that we have to make in terms of how we balance all of those component parts is really important. So, I think, for us, it's that board ownership of the challenge, but also, then, a really clear delegation and expectation setting within the organisation.

Thank you very much for that. And I'll ask the follow-up question, which is to the other three members of the panel: you've heard that answer, is there anything that Cwm Taf is doing that you could implement in your own organisations, and, if so, why haven't you already done it? And I'll start with Mr Holcombe.

So, I think, just echoing what Paul's just mentioned, in our health board, we've got a fundamental system of grip and control that we've established. Aligned to that is our planning process, very similar to how Paul has described things. I think some of the elements that are different in Aneurin Bevan is some of our more recent history, with opening a new hospital. The ability to change the system that we wanted to on a wider basis and rationalise, consolidate, and get, ultimately, a sustainable system going forward, has been a challenge, largely due to demand and acuity change. We've seen a particular increase in cancer referrals that we're dealing with, but also emergency care. Attendances are coming through as more acute, requiring more care.

In terms of the structure around planning and savings and expectations around targets, all very similar to as has been described for Cwm Taf. Part of the challenge, I think, in Aneurin Bevan, is balancing the safety, the quality, the finance and workforce et cetera, as described, and also expecting a level of savings. So, we've been running, for the last three years, with savings in excess of £40 million a year. That's a step up from previous years. So, I think the challenge is balancing all the parameters in the round. We've got a three-year recovery plan that we've established now that's been shared with officials in Welsh Government and we're working to recover the position now, using the three-year framework to try and achieve that.

Thank you. Mr Kloer.

Diolch, Gadeirydd. So, I think, rather like Mr Mears has described, we have a similar programme around grip and control, around the way we have a performance accountability framework in the organisation, and we also have applied planning approaches very similar to Cwm Taf's. We're always seeking to learn from other health boards. I do think there are some general cost pressures on organisations that are similar across organisations, and then I also think there are differences in the environments that each health board works within. So, I think workforce supply, continuing healthcare, the prescribing medicines, all of those things are general across all health boards.

But I think, for Hywel Dda, we cover a geographical area where Swansea is only halfway across Wales. Our travel times are two hours from the bottom to the top, whereas I could easily drive to Swindon in that time. In fact, you could fit all of the other health boards in the south of Wales into Hywel Dda and still have room for a lot of Gloucestershire in the health board. So, I think, when you look at Hywel Dda and the challenges our communities face, and that environment, with a small stretch of M4 into our patch, it provides real challenges. There are four hospitals in Hywel Dda: Prince Philip, Withybush, Glangwili and Bronglais hospitals, and Bronglais plays a really important role for mid Wales. Each of those are really supported by their communities, but each of them has an acute medical take: three of them have accident and emergency departments, three of them have orthopaedic units. We have quadruplication and triplication in Hywel Dda, and even then, on each of the sites, we are not—. Each of those sites, therefore, is quite fragile. We've got three of the top smallest district general hospitals in the whole of the UK, and Bronglais is in the top five smallest.

There are real sustainability challenges, and that then leads to increased costs, it leads to increased costs on agency, and challenges around securing the right workforce. So, I think, for us, when you look at the allocation to health boards, it is, of course, adjusted, as we understand, for population and demographics, but it is not adjusted for configuration or the effects of rurality and coastal services. That doesn't mean that we aren't focused on all the things that all the other health boards are focused on around grip and control and proper financial and budgetary managment.

Thank you. Mr Hopgood, being a fellow Powys resident, I'm sure I know what you're going to say, but let's hear it from you.

Yes. So, without repeating certain comments made, clearly, in Powys we face that—the demographic, the rurality challenge, the ageing population, the reducing population of working-age people within the county. Clearly, we have no district general hospital, so we commission a level of our services. That adds a layer of complexity.

If I just go on to the grip and control and the learning from Cwm Taf Morgannwg, we have that same focus. We have a financial recovery board. The board and organisation owns the financial challenge. We've established a route-map to sustainability, which looks at bringing us into a sustainable position over the next three years, and we focus on those opportunities to improve our financial performance.

It is worth noting as well that we are in escalation for finance and planning. We're in normal and routine escalation for all other areas and all other domains, so it's important to make that point. Thank you.

Thank you. I'll pass over now to Anna Nicholl.

Thank you. I was going to look at Hywel Dda, unsurprisingly, particularly and, actually, part of my question was going to be about what might be unique there and so I'm really interested in what you've just said. I think the case for—. Actually, there are four hospitals. They're doing different things, I suppose, but, because of the rurality, and Bronglais also serving other areas, there's something—. I've listened carefully to what you've said about the need for resource allocation around there, and three A&Es sounds like a lot, but perhaps when you look at the geography, it does make more sense than it might sound, just compared to the other areas. So, thank you for that, and I would love to explore that further with you. But my question that I'll focus on is that Hywel Dda does seem to have a particularly poor record in some areas—level 4 on the escalation framework for finance strategy and planning, not met that first statutory financial duty, and a considerable overspend, it seems, last year, on the revenue budget, I think I'm right in saying, if I understand, that has never achieved the second statutory duty since 2014. So, there are some big challenges there. It does look as if the last couple of years have been better, although heading to be, again, a considerable overspend for this year. And again, it seems like it's not about the financial management, from the Audit Wales report, because that seems to be sound. So, there's something here, I suppose, about what is happening for transforming the services and the delivery and the whole system over the longer term. So, you're looking for a long-term shift, it seems from Audit Wales's report—that's really what we need to make sustainable services. And it seemed to me that that was a difference between the sorts of savings that were happening in Cwm Taf Morgannwg, which is that, actually, these were savings that were going to be spread over the long term. Whereas it felt like, in Hywel Dda, quite a lot of the savings were just year-on-year savings and not looking like they were sustainable. So, what are you doing to make sure that you really invest in those transforming services in the system to create sustainable finances over the long term? It was a long introduction, sorry.

So, there's quite a lot in that question. I'll try and keep it brief. I suppose, we recognise that we need to have a longer term outlook than just one year. So, we're working on our route-map back to financial balance; we're being supported in producing that. We are in level 4 escalation, so we are seeking support to achieve that. It's an enormous ask over the next three years; we need to make about £105 million-worth of savings and on top of that, and there's about another £21 million per year in inflationary costs. So, it does add up to a very big number. At the moment, we have an opportunities framework of around £127 million, but that includes a significant proportion around service configuration and then there are a whole range of other areas that mount up to the £127 million. So, we are taking that longer term view.

We have made significant progress over the past few years and that's been across a whole range of areas of savings. We've reduced our headcount by about 300, particularly with some of our nursing work, reducing agency particularly, because, in fact, we had a whole programme of that, which started in 2022, actually, so we've seen the benefits of that in the last couple of years. But you'll see from our reporting that we've made savings across particularly medicines, continuing healthcare and a whole range of areas over the past few years, where we've been harnessing the outputs of the national value and sustainability board.

I do think we've got strong financial governance corporately, as you were suggesting, and we've had reports in our structured assessment from Audit Wales that are concordant with that. I think the challenge is in our delivery, and some of that is because it is quite challenging to do that across our current configuration. Some of it is that we just need to improve our grip, pace and impact, and we do recognise that.

In terms of transformation, I do think we've got a clear strategy, and two really key components of that are our move to a more community and primary care focused NHS—there are all sorts of programmes of work that we have under way that support that—and the other area is around digital AI and tech. We're already implementing systems that are having a real impact on the way that we provide care, so our electronic prescribing, medicines administration system, we've got electronic observations being rolled out, and we have a flow system now in place, which we put in place last year, which gives us a much better sense of where all of our patients are. So, I think those two things are where we're trying to allocate resource, frankly, to make sure that we are building for the future, as well as trying to manage the current challenges we have.

Thank you.

Shav Taj.

I've got a question for you, Rob. My question is: you've mentioned the forecasting deficit of about £40 million this year—I guess what I want to understand is what confidence you can give us that you will become sustainable over the next three years and what do you think is the biggest risk to actually achieving that in real terms?

In terms of the confidence of delivering the anticipated plan, we've established a series of work streams under our value and sustainability board, which is our savings board. So, we've got 13 work streams, including the main ones around workforce, medicines management, continuing healthcare. There's a range of others. Those work streams have plans that we consider to be reasonable but ambitious over the next three years in terms of cost reduction. The plans have been established through the board, through the executive, working with the service as well. There's an executive lead for each area, so it's not just sat with myself and the chief executive, for example. So, we've focused very much on the communications around the development of that, getting ownership of that from people who actually make those commitments within our organisation. There's a whole governance structure around how we would expect delivery of that.

Aligned with that, then, is a monitoring and assurance mechanism. We've got escalated finance and performance committee meetings currently, because we're in escalation anyway, but internally escalated, where the chair has personally taken over the chairing of those, again with a focus on recovery, monitoring savings delivery, looking at the sustainability of what's emerging through the work streams. There's a wider element, then, around the future, coming on to the element beyond that, which is, as others have mentioned, around transformation and the agenda that we need to progress around that around our new Gwent 35 strategy, which is very much around dehospitalising care, but also creating efficiency and improving our bang per buck—

Do you think that's realistically achievable? Do you think you can do those things within the three years and get us to that sustainable model? Do you think you've got the right players around the table? Has everyone bought into that vision?

As a health board, yes, I believe we do. Previous to our current strategy, Gwent 35, we had a strategy called Clinical Futures, which was very much around rationalising and consolidating as far as possible our acute services—Grange hospital was a key enabler of that—and then also looking at how we develop support and shifting services upstream and into the community around prevention and the primary care agenda. The Community by Design strategy now is very similar to our previous strategy. It's not something that is a brand-new concept to health boards.

The challenges—it's quite a while ago now, isn't it, but the implications of COVID paused things. The ability to progress our strategy in the aftermath of that has been quite challenging, as I mentioned earlier, around the acute—

And what's the biggest risk?

I think the biggest risk is the external factors to us on a financial basis, particularly inflationary driven. So, some examples: continuing healthcare, acute drugs, particularly, new technologies around cancer, some specialised services, technology growth and expectations around that. They're areas where, historically, inflationary funding for health boards hasn't kept pace with some of the external elements. We know there's a historical trail around that, the risk is whether the assumptions in Aneurin Bevan health board's growth forecasts come in line with what they actually come out as when they come to fruition. We're ambitious, we're looking to do as much as we can within this. We have assumed an element of growth in excess of potential funding, hence the headroom on the savings is quite an important factor for us—that's our risk mitigation.

Okay, great. I've got one more, in relation to—. I’ve got one for Phil. Obviously, you’re at level 4 in terms of escalation and you’ve talked us through how that is working at the moment. You’ve referred to some—. Was that in relation to prescribing medicine?

Yes.

The AI, this new technology that you’re using—are all the health boards now using that same programme? What does that look like? Do you think that that’s going to be a bit of a game changer for how people see health, how people can actually view their own records?

So, the prescribing system I was describing is electronic prescribing, medicines administration, so it allows doctors to do the prescription digitally rather than handwritten, so it’s a big improvement in speed, in effectiveness at ward level. It’s also better for patient safety because you get less medication errors. We are behind in Wales on that; it’s already in place in most systems, definitely in England. Many other health boards have either got one or are getting one in place. I think—

Is it important that everyone has the same one?

So, we’re working at the moment with Government. There’s a review at the moment where,3 actually, one of the key principles of that is much more standardisation across the NHS. I know Paul will have something to say on this, but I know that together, as chief execs, we’re recognising just how important it is that our systems are similar when we’re implementing them across Wales, so we don’t have slightly different ones in each health board.

And do you think that, in terms of the plan that you have in place to tackle the level that you’re at, the public can have confidence that you’ve got this now under control? Is there something that over the next 12 months we can definitely see will change, that will give the public confidence, but also us as a committee?

Yes, from a financial—

What’s that golden nugget?

Yes, well—

Well, if you’ve got one.

I suppose the reality with improving our finances is that there won’t be one single thing that solves it. It’s going to be action from a whole variety of quarters, which is why our plan includes things that are everything from—. Well, we have a 40 million predicted demand growth every year for the next three years, so we’re trying to modulate that demand growth through a population health approach. There are elements of it where we need to work much more closely, where we’ve got planned working, with our local authorities around much better care for people in the community, which is much more effective, so people aren’t stuck in hospitals. And then there’s the kind of grip and control, and then there’s efficiency, which I think we do very well around our reduction in follow-ups, and we’ve got programmes around theatre efficiency. So, I suppose the reason I say all of that is it’s not going to be one single golden-nugget approach in this, and I suppose there is a reality of the scale of it that means that we can’t continue to run all of the services exactly in the way we are at the moment, and reduce the costs. So, an element of this will mean that there’ll need to have to be some changes in the way our services run.

So, if I can just refer back to Anna’s point earlier around, for our population, given it’s widely spread, wouldn’t you have three A&Es? I suppose geographically, yes, you would. From a population basis, for 384,000, no, you absolutely wouldn’t. You absolutely wouldn’t. And this is part of the challenges. Would you have four medical on-call rotas and all the incredible cost of that for a 384,000 population? Absolutely not, you would not have that in place. However, we do, and, of course, those are only two services I’ve mentioned. I can mention many others that are quadruplicated or triplicated, and—

Can I just ask, you’ve mentioned grip and control a few times, but, obviously, there might be constituents or others watching this wondering what grip and control even mean. What does that look like? What does that mean?

So, I suppose, it's proper, basic financial management of budgets.

Yes.

Attention to it. So, we have a monthly reporting cycle in the NHS. We have two-weekly executive oversight of each of our budgetary performance and savings profiles, and then, of course, there's much more frequent business partner work on a weekly, if not daily, basis. So, that is, I suppose, what I mean by 'grip and control' financially. It's a similar process for performance—

Okay.

—to make sure that we're meeting our performance expectations.

Thank you. Thank you, Chair.

Thank you, Shav. Andrew R.T. Davies.

I'd like to direct my question, if possible please, to Aneurin Bevan, Cwm Taf and Powys health boards. In relation to the revenue resource limits, what went wrong after 2022-23? Because, up until then, the health boards were sticking to the limits, but then, from 2022-23, those limits seemed to go out the window. So, what went wrong?

Mr Holcombe.

So, I presume this is where the question is related to the deficits emerging since that point, just to clarify.

That's correct, yes.

So, I'd reflect from—. If I talk about Aneurin Bevan, from my perspective, there was a step change in our demand. And I'm conscious when talking about COVID that it was quite a while ago, but it's a significant factor in terms of, I believe, where the NHS in Wales finds itself now. So, there was a hiatus in a lot of care being provided during that period, and then we've had a wave of demand emerging since that point: a whole host of issues emerging through primary care, community care, out-patient demand, I've mentioned cancer already, and significant demand then for waiting lists, waiting times.

Some of those issues have been supported through non-recurring funding, so that's been a positive and we've been able to really have an impact on patient benefits as a result of putting services in place. However, there's a lot of cost pressures that we've had to deal with, through, as I mentioned earlier, the acuity and demand following that, which we're still continuing to deal with.

Some of the issues that we are facing—sorry, I'm trying not to repeat myself—are related to inflationary uplifts versus market forces. I've mentioned continuing healthcare. For continuing healthcare, the average cost for us is around a 6 to 7 per cent uplift. The uplifts allocated for the organisation haven't been to that level.

Another one is particularly around specialised services. I'm trying not to repeat myself, but the running costs of the service, the demands from the population, safety, a reasonable quality, and balancing the cost pressures aligned to that have been a challenge. Obviously, we look to create savings and efficiencies. One thing to note, though, is sometimes efficiencies cost us more money. So, we can do more, the unit costs will be lower, but, actually, the quantum cost will generate a cost pressure.

In addition to that, we've had certain contractual pay settlements that will generate cost pressures above certain funding levels. And, again—

How big an impact have those pay agreements had on your budgets? Because, obviously, everyone has to live with inflation, and we're hearing this time and time again about inflation. But pay deals and pay settlements are up to, obviously, the negotiations, and for the employers to agree. So, how big an impact do those pay agreements have on your budget outcomes?

So, the majority of pay settlements and agreements do receive allocation uplifts. However, they're usually based on a set point in time. As an organisation, particularly Aneurin Bevan, we've found that we've had to increase our staffing footprint in terms of dealing with acute pressures, additional bed requirements. Some of the settlements don't get supported with additional funding, and the knock-on effect of that in terms of premium rates—. So, if the pay for a particular pay band goes up, the premium will shift as well, where we need to get temporary staff in. So, again, we're balancing temporary pressures with temporary staff at an increased rate whilst trying to maintain our substantive workforce within affordable levels. And part of our strategy in Aneurin Bevan, particularly with the spike following COVID, has been to reduce our variable pay and agency costs through recruitment to substantive posts, which gives us a more sustainable solution, a lower cost, and better quality, actually. So, the challenge is just triangulating the service workforce and the financials, and savings levels, I think, from our perspective, have been ambitious, but not quite where we need to land them. So, yes, hopefully that answers that.

Thank you. Mr Hopgood, the same question to you as well.

Thank you. I think, if I make a couple of comments, because a lot of the themes will be very similar. So, that increase in demand, as Rob has highlighted, has been a pressure for all of us. For us in Powys, that's hitting key areas which contributes to our underlying deficit, that being continuing healthcare, commissioning, and, on mental health, operational and use of private providers.

I think one of the other challenges has been delivering savings on a recurrent basis. So, we've had success delivering savings in year, but often they're not at the full level recurrently. That means that that ask goes into the next. To give a bit of an example, I guess, for us in Powys, we've got a £44.7 million deficit plan this year. Obviously, significantly worrying. To deliver that plan, we need to deliver £22.9 million-worth of savings. And the plan this year is us stabilising our underlying deficit position. That means that, after identifying our growth, inflation, and other cost pressures, adjusted for funding, we need to save 6 per cent, which is £22.9 million for us, just to stand still and to stabilise. On a positive note, we have identified those savings and we're on track for delivery. There are some risks around that delivery. Importantly, we've identified £20 million of that £22.9 million recurrently, which puts us in a more stabilised position going in to the next financial year.

Okay. Mr Mears.

As you can imagine, the common themes from my colleagues as well. I suppose, just reflecting also, post COVID, if you look across Wales, there's been head-count growth generally, as Rob rightly highlighted, much of which is to deal with increased demand and pressures in particular service areas. We talked earlier about the need for having good control and financial control. I think, obviously, during the COVID years, there were priorities—we had to just get through the situation. There was money coming in. I think people's eyes, frankly, were focusing, rightly, on doing the right thing for the patients and trying to maintain services at a really, really challenging time, so I think we've had to go through a process of getting people back in the mindset of good financial control and management. And we did also see quite a bit of turnover, increased turnover after COVID came to an end. Many of our staff who were able to retire or near to retirement chose to leave or retire, so we saw an uptick in turnover. So, that will often lead to more temporary staffing costs, agency, and things like that.

The other thing to highlight is that we're consistently also trying to manage things like length of stay. So, whilst we're talking here a lot about direct costs and cash out, there are also costs associated with people staying in hospital longer than they really need to be. I'm sure, all of us—particularly Phil, Rob and myself—would recognise that we have a number of people who are sat in hospital beds today who don't need to be in a hospital bed, and we are looking after those people in the most expensive bit of the system when they could be being cared for in facilities, particularly in their own home, with better enhanced support in their own homes. So, whilst it's not a direct cost, there is a cost, obviously, to keeping those people, because it will often mean we have to increase our bed capacity on an interim basis, using temporary staff, to accommodate the emergency patients who are arriving. So, those things, I think, have escalated and have been quite a challenge to manage over the past few years, but that would be a perspective to add to the points made by colleagues.

Thank you.

How helpful—because you talked there, Mr Mears, of people learning to live within budgets again after the COVID years—how helpful is in-year extra money that the Welsh Government makes available, very often for specific projects, in terms of embedding that mentality about sticking to your budgets? Because, obviously, there are significant amounts of money introduced into the NHS on an in-year basis. The total control spending limits that were agreed were £123 million in 2022-23 and the actual health boards hit £185 million, so went £50 million over. And then, the following year, the agreed limit was £85 million and the actual outturn was £124 million. So, going back to the point about controlling budgets, there's a counter-argument here that says, 'We'll just hang around and we'll get more money coming in year to support us.'

Throughout the year, historically, there have been—. As well as the initial allocation we receive at the beginning of the financial year, there have been examples over the past few years where money and resources have been made available for particular issues, policy initiatives or, if you look at the work that was done last year on, for example, trying to reduce waiting times in out-patients, there was money put in to that.

I think it's fair to say, though, that in more recent times, there's been an attempt to try and consolidate all of the resources in the allocations at the beginning of the year. Because I think there is a recognition among civil servants in Government that the scenario you've just described there isn't particularly helpful, either in terms of long-term planning, because it makes it very difficult to plan for some of these things because you never quite know what money's going to come when, so there's always an element of not knowing. Secondly, it can come quite late in the year often, which makes it difficult to deliver the expectations that have been set. Because it can often arrive, I don't know, in month 6 or month 7, which doesn't give you very long in the year to deliver the ambition. And, as you rightly say, there's a cultural mindset of people thinking, 'There may be a pot of money coming over the horizon, so maybe there'll be some opportunity for us to get things back on track with the additional resources.'

So, I think we would all advocate that having your allocation set in its entirety as much as you can do—. I acknowledge fully that there are always going to be bits and pieces throughout the year that pop up that need, potentially, a bit of resources allocated, but knowing that you've got that allocation for the year and being able to have the ability to get on and plan on that basis is the best way to ensure that you can do your own internal budgeting and planning properly with your teams. Because, otherwise, it does become a bit difficult for us to narrate internally to our staff. If money pops up at the eleventh hour, people will turn around to me, in my organisation, and say, 'Oh, well, this happens every year, doesn't it? So, you know, we'll hang on.' But I think we are moving away from that and I think trying to get that culture and mindset instilled in our teams is a big part of this ambition to bring the whole system across Wales back into a financially sustainable position.

Okay. Thank you.

Thank you. Carrie Harper.

Could you talk us through what the consequences are for health boards not meeting the first statutory duty and the Auditor General for Wales qualifying the regularity opinion as a result? I suppose it's maybe a question for one person to start, maybe Phil.

Diolch. So, I suppose, for health boards, the consequences are set out in the accountability framework to start with. So, we're in level 4 for finance because of us failing to meet that duty. In fact, we have, as an organisation, failed to meet both duties for well over a decade; in fact, I think, probably since its inception. So, the different levels mean that there are different kinds of intervention support that are provided. So, for level 4, it's the second highest level and, therefore, there's an expectation of a different level of intervention and support. That means, therefore, that we also—. There's considerable scrutiny of our finances, both at the moment, now, by NHS Wales Performance and Improvement with its new role, but also by Government in our formal escalation and accountability meetings, as well as regular meetings now with NSPI. Other health boards at lower levels of escalation will not have that routine scrutiny in place.

Thanks for that. Following on from that, we were told in a recent meeting by Audit Wales that a qualified regularity opinion for not meeting the statutory duty is actually becoming the norm now and it's losing its punch. I'd be interested to know if all of you agree with that. If not, why not, and, if so, what's the way forward?

Do you want me to respond to that? I don't think it's losing its punch. I think we're all very aware of what our duties are and trying to live within our means. A lot of what Phil's just described as the current mechanism, some of the more practical elements from Aneurin Bevan's perspective were, obviously, the increased focus requirement for an opportunities pipeline, for example, and, ultimately, a financial recovery plan to achieve long-term sustainability. So, from my perspective, I would say that the focus continues. It's not a place we want to be as an organisation—I'm sure none of us want to be—but, for all of the reasons we've described already around some of the pressures we're dealing with, there's a bit of headroom required, I think, for us to reset and get to where we need to be sustainably. But the board, and I would suggest all boards, are very aware of the requirement to recover and be financially sustainable.

Alun, you've got a follow-up.

Yes. Just to follow up—sorry, Carrie—if that's okay.

No, go ahead.

Just to follow up from that, I find it hard to believe that it's not becoming the norm, and I find it hard to believe that it's not losing its punch. Because something that happens persistently, apart from going into different levels of regulation—. It's hard for the public to see what the change is within the board, because each time—as you say, with some boards, over a decade, maybe more—that position has continued. So, it's hard to see, for two things, how it's not become just a, 'Well, that's where we're at', and, you know, 'If we're all in it', then has it lost some of its issue because of that? And there seems to be little—. I think the public, quite rightly, has a low level of confidence of coming out of that, because of the persistence of that. Does that make sense to you?

Sorry, do you want me to start?

Oh, to whomever.

So, I can see the lens. I think one of the things that's probably worth describing, touched on earlier by Paul, is the process of planning that we have. So, we have the requirement for three-year plans, with much more focus on the coming year, because of the funding envelope, and you've got more line of sight in terms of some of your assumptions. But most organisations—I'll ask colleagues to confirm—start to establish next year's—. The coming, next, year—as an example now, we are now looking at what, potentially, next year looks like, with the aim of trying to establish our likely performance levels, service requirements that we need to meet within that financial envelope, and workforce. So, there is an awful lot of work that comes to a point where an organisation is casting its plan to submit to Welsh Government. So, I just wanted to reinforce that. And I would describe that the iterations and the scrutiny internally, with the board et cetera, are quite significant before we get to that point.

There's another factor I wanted to pick up, and you could look at this in two ways, which is around—. The deficits in percentage terms aren't big percentage numbers; in pound terms, they are multimillion. So, I'm accepting that. But I would reflect also that patient safety trumps everything and sometimes that drives some of the cost pressures. So, yes, just to reiterate the amount of work that goes on, and the seriousness that is taken by an organisation.

Okay.

Back to you, Carrie.

I think Alun's reflected the frustration, that it feels like we're not really moving forward, and I say that as somebody who represents a constituency in north Wales, and, obviously, we've got the situation we have with Betsi. So, I would be interested to hear if others have the same view as Rob on that. People have put their hands up, so—.

Mr Kloer.

Diolch. So, I suppose the public, rightly, would expect to see improvement if we aren't to meet it in-year, which is why we put so much focus on the three-year financial and, actually, whole-system recovery map back to balance. I do think there is a challenge when we set our plans, as Rob has said, that we are trying to balance quality, safety and performance across all of—as well as the financial duty to break even. So, there's a really careful balance. Some of those challenges relate—certainly in our health board—around agency, locum pay and sustainability of rotas. If we just came at it from a financial perspective, we would end up making very rapid changes, which would cause all sorts of problems, which is why there's a balanced approach. However, we do take the responsibility really seriously, because, actually, as I said right at the start, in the end, housing, education, employment—all of those things improve population health and well-being much more than healthcare does; healthcare alone is only about 15 per cent. So, we're really mindful of that, that every penny we spend is something that can't be spent on all those other areas. So, that is absolutely intrinsic to how our board works and as we try to progress towards that statutory duty.

Mr Mears.

So, I would just build on what Phil was saying there: I think the challenge is how you move beyond the in-year incremental small-scale changes that we're all trying to do to get to a year-end position with the actual bigger transformational change that's actually required to deliver a long-term sustainable plan for the NHS, both nationally but also in our own organisations. You think about the opportunities of things like digital investment and the potential that that has to transform the way we deliver care, and transform the way we deliver our back-office services—those things all require investment upfront. If we were a private company or a business, you'd be saying, 'Well, I'd accept this year I'm going to have to invest the money and maybe have to take a loss, but I know, by year two or year three, I'll be turning that around, and that's where the benefit comes.' We've got to always continually think, 'But we've got to deliver this year.' So, there are things that we will often have to try and do that we would like to do more of, but we haven't got the resource to try and do this year because we want to try and balance the books as well.

The other thing I'd say is that some of those things are also going to be, potentially, challenging to navigate through with our local communities because we know—. Phil was describing the example there in his area of four hospitals trying to do everything. We have to have some conversations about how some of these things are changed, using technology, using different workforce models, using different ways of delivering services. Those are often things that need to be navigated through, obviously, consultation and engagement with local communities, with staff groups, with other professional bodies, which can take time. So, I don't think you'd—. You can detect that there wouldn't be a lack of willingness of any of us here to try and do those transformational changes; it's how do we try and do that within the constructs that we're working within, some of the statutory responsibilities around engagement and consultation, which, rightly, takes time.

But it is that bigger transformational change that's required to deliver a sustainable plan for the NHS, because, frankly, just tinkering around the edges at the moment, trying to make in-year savings, whether it's through non-pay cost reductions, or in-year non-recurrent savings, that's not creating a sustainable long-term future for us all. So, I think some of that is within our gift to sort, but there's also that wider conversation about what the policy environment looks like and the longer term financial plans for the NHS across, but recognising that a large part of the Government budget is already being spent on the NHS. It's how we use that money in a more efficient way to drive that wider transformational change that we all know is needed.

Okay. Iain McIntosh.

Thank you, Chair. I wanted to ask a question about how savings are monitored through a financial year, and it's to Mr Hopgood, please, if that's okay. Now—we're obviously talking about Powys Teaching Health Board—at month 7 last year, the health board had delivered about £8.5 million against an annual savings target of £23.1 million, leaving £14.6 million still to deliver in just five months. So, the board could see the shortfall developing month by month, therefore at which point did you accept that the target was unlikely to be met, and what corrective action did you take?

So, in the last financial year, we did deliver our savings target at the end of the year, but we didn't deliver it on a recurrent basis. If helpful, if I talk about the arrangements we have in place in this financial year, as I mentioned earlier, we've got an established financial recovery board. That financial recovery board is chaired by the chief exec—myself—and it focuses on identification and delivery of savings. So, in the early part of the year, the focus was on identifying all the schemes needed to deliver against our savings target, £22.9 million, then, once those schemes have been identified, on ensuring delivery and then on ensuring recurrent delivery. That's a key part of this, as I mentioned earlier.

So, that constant monitoring, checking that actions identified have been taken, that they're delivering the savings intended, is a constant focus for the financial recovery board. That meets on a fortnightly basis. That then reports up via our finance and performance committee onward to the board, so, at a very high level, and that gives you that oversight and focus. That financial recovery board includes our turnaround director and also all executives, so all areas of the portfolio are therefore covered.

As that has progressed, we're now moving into firming up actions and identification of our savings for years 2 and 3, similar to what others have described, ensuring how that fits into our plans going forward for next year, our integrated medium-term plan et cetera.

Okay, that's helpful. So, what actions do you actually introduce, then? Say, for instance, you end up in the same kind of predicament next year, where you've got the majority of your savings to be found in the last three or fourth months, or whatever. What actions did you take this year then to reach that target that made the difference in being able to obtain that £14.6 million at the end?

I think establishing our financial recovery board was a big help, a step forward, signalled a culture expectation. We've also brought along an increased programme management approach and discipline that supports that action and that delivery, and that's helped to turn those actions into delivery, as I said. And our current position is in a good place—still work to do, still risks to manage, but is in a good position.

Okay, thank you. I've got another question. Do you want me to do that one?

Yes.

Yes, okay. Sorry, it's to you again, Pete.

That's okay.

Grant Thornton estimates that its recommendations could produce more than £20 million in net savings, but says that would still not eliminate Powys's underlying deficit, and that wider decisions about services will therefore be required. Now, for every Better Together proposal, will you therefore publish the net financial effect after accounting for additional ambulance journeys, social care pressures, treatment commissions from neighbouring hospitals and any other costs transferred elsewhere? Otherwise, I think the point I'm making is: how we can distinguish a genuine saving from a cost that's simply moved to another service, or to patients and their families?

Okay, thank you. I think the first important point to make is that, when we talk about sustainability going forward, it's not just money—it's service sustainability, it's workforce sustainability, it's being able to meet future demand, it's being able to reduce future demand so we can provide those sustainable services. I make that point because you were talking about our Better Together consultation. That's the consultation that's in place at the moment to talk to the Powys population about the future of their health services, and how we can ensure they're in the best place possible to meet those outcomes that I've just referenced. We have the relevant modelling and details included in our pre-consultation business case, and that is part of what we're consulting on at the moment.

Okay, thank you. Thank you, Chair.

Thank you. Back to Anna.

Thank you. I want to touch on productivity. The former Auditor General for Wales has said that productivity is key and if that doesn't improve, then we're on an unsustainable trajectory. And I understand that Welsh Government has introduced new systems to help measure this. I think Phil touched on earlier that some of this might be linked to the new digital systems, and be about standardisation and sometimes centralisation. I've been really concerned to hear some examples—it is more anecdotally—where staff are saying that productivity is going down in some areas, as they see it, and that a lot of staff feel that they're not really enabled in the system to be part of the innovation. They feel they're voices aren't listened to and that a lot of the decisions are being driven at manager level and by these central systems, when it's them on the ground that can really see, especially in rural areas like ours, that some things can be—. People are very far apart, so they're not feeling like they can make that difference, but they can see in front of them how you actually improve things. I've also heard that link—where people are feeling disempowered, then that links to staff sickness rates, well-being, recruitment and retention. We've had workforce disputes, et cetera. I'm concerned that, actually, some of the activities we're doing, perhaps in the name of increasing productivity, actually can be driving it down. So, how do you feel that productivity is going—I might be totally incorrect—and how are you enabling staff across the system to be empowered to be part of driving this increased productivity?

It's a really important question. We talk a lot about financial efficiency and savings, but, actually, what you're just describing is absolutely key, which is how do we get better use of the existing resources we're already deploying, whether those are physical resources, kit or whatever it is. You're right that there has been a lot of work done over the past couple of years with the NHS in Wales. There was a ministerial advisory group that reported about 18 months ago, which highlighted a number of areas of potential productivity growth, particularly around things like, 'Are we getting the maximum throughput in our theatres? Is everybody delivering the standard of eight cataracts on an operating list for cataracts?' And what you find is that there's quite a big degree of variation both within organisations and across organisations. So, there's a lot of opportunity around metrics such as that that actually are hard measures, if you like, of how many more we can get through with the existing resources.

The point you made, though, which I think is really important, was that this narrative can't be, 'We just need to work everybody harder', because, actually, that, as you rightly say, doesn't do anything to motivate or engage our staff. There's been some recent work done by the Health Foundation that highlights that the biggest productivity opportunity is actually through a greater degree of engagement with staff, because if staff feel engaged and motivated, they will often, understandably, feel more engaged, want to do their job better and will come up with the ideas of how they could do their job better. So, there is very much a balance that we're all trying to strike, which is around some of the conversations we've just been having about control of cost and making sure that that is managed property, but also supporting and engaging our staff to say, 'And what opportunities do you think we've got to make things better?' And, as you rightly say, many of our staff will come up with ideas and highlight things that they think are not supporting them to be efficient.

One of the things that comes up frequently is things like digital opportunities—how we could be using technology in a more efficient way to do our jobs. We've still got lots of our staff using paper-based systems, walking around with piles of notes. We've got vans driving around our communities with notes in the back of vans. In this day and age, I think we'd all acknowledge that that is not where we need to be and it's not an efficient use of people or time, but also that poses a risk in terms of the information not being readily available for a clinician when they need it. That's just one small example; there are lots and lots of examples where technology could massively enable our colleagues to be better.

Some of the other things that crop up are things like the physical estate not always being configured in the best way. When you have the opportunity to design a new facility, you design that productivity and efficiency into it. In many of our facilities, we're operating an estate that is older. It's having to be reshaped and reformed to meet today's needs, but is often not always that efficient. So, there's a combination, I think, of both the staff engagement, as you rightly describe—. Certainly, in my organisation, we've got a group of colleagues who support teams that want to do improvement work. They'll go out, work with them, help them conceptualise the idea, turn it into a reality, help them measure the impact and the success, and also then share that learning with other teams across the organisation, to say, 'Look, this team did this and it's probably got read-across into your area.' And I know other colleagues will have similar arrangements in their own organisations. So, absolutely, that staff engagement and learning and innovation coming from the ground is a really important part of the productivity conversation.

It sounds really positive that staff are seen as a major resource, rather than seen as a cost, sometimes, to be cut. I don't know if Phil wanted to come in.

I'm happy to. Rather like Paul has said, there is a whole set of clear enabling actions that came out of the ministerial advisory group. We're all aware that that's a standardised approach across Wales, so we're all working towards those. We've had some success around patient-initiated follow-up and use of 'see on symptom' in out-patients. As chief execs, we're looking at pushing that further, because we don't want valueless appointments—people coming to appointments that aren't of high value—and it's a waste of people's time as well. Also, we've been working on theatre efficiency and a whole range of things within that enabling framework.

On your point about the staff, I suppose there will be some people who really like change and have got ideas about how they want to change their teams, and there will be others where they're quite fearful of it. Some of the changes in productivity that we're describing need to be carefully managed, because they've been doing something in the same way for many years. We recognise that.

The staff survey—there is a staff survey every year. I'm not sure whether the committee's aware. It's just been launched. It's really important we're promoting that to get as many people to respond to that as possible. Each year it's creeping up. We do, in our health board, routine culture pulse and temperature checks in different areas, and we've got workforce and organisational development managers embedded within our clinical care groups, where they can pick up the results of those conversations.

A number of us have different ways we approach innovation. We've set up something called the TriTech Institute, which is a connection between our researchers, innovators, clinicians and our engineers, where we can test new tech in the healthcare environment. We've got quite adept at that over the past five years. We've also set up a social innovation centre as well, given the move to a more social model of health and well-being. We set that up with the University of Wales Trinity Saint David. I think you're right on the innovation and trying to capture the staff, and not just in our hospitals but also in primary and community care there is an entrepreneurial spirit.

I'd be really interested, Chair, over time, in seeing how that innovation, especially staff-driven innovation, has worked across different health boards. Thank you.

Thank you. Shav.

In terms of innovation and getting staff involved, social partnership plays a real key part in that, and, of course, trade unions are a big part of that jig-saw. My question is really for Paul, but other colleagues may want to also respond. The industrial action dispute, the health worker dispute, has been running since February 2026, and recent reporting says that routine appointments have been restricted, while Unite the Union says that thousands of appointments have been missed. I guess my question is: what impact is the dispute or has the dispute been having in terms of services for children and families, and how are you then maintaining that essential provision? Ultimately, this is about potentially additional workforce pressures. Financially, how are you managing all of that?

As you say, the situation we have with the health visitors has been ongoing for several months now. Obviously, that's meant that we've been having to make contingency arrangements to ensure that the highest priority children are safeguarded appropriately. That is a piece of work that is being led by our director of nursing and his professional team, who have been going through the most high-risk cases and ensuring that they are all appropriately being safeguarded and the right care and support is being put in for those particular families at risk. We're obviously working very closely also with our local authority partners who have a key role to play in safeguarding, because many of their professionals are also dealing with those families as well. We've also made changes to the way the service is delivered. We now have a single point of contact, so any family in our patch that has a worry or an anxiety about their child or baby can phone and, within an hour, will get a call back from a health visitor who will have a conversation with them, find out what the situation is and, if necessary, send out a health visitor to visit to ensure that they are appropriately supported. Or, if they don't need an immediate response, they'll be signposted to either an alternative arrangement or a clinic. And we're also putting in clinic-based interventions, so rather than professionals going to see just one family, we can invite the families to come to a location where, obviously, it means we can be more efficient with the limited capacity we have got available for them. So, it's an ongoing process of a weekly review. Every Monday, in my executive meeting, we review where we are with the position on health visiting and ensure that we are doing the necessary things to ensure safeguarding, and as well, obviously, working closely with colleagues in the union and our staff-side colleagues to try and bring the dispute to a resolution.

Obviously, without asking you to comment on the ongoing negotiations, because they are ongoing, what lessons do you feel that the health board could take from this dispute about effective social partnership working and engaging with staff very early on? And I guess that's a question more widely as well, for everybody.

I think Phil touched on it earlier, that the reality, as I said in one of my responses earlier on, is that, if we are going to deliver a financially sustainable healthcare system for the population of Wales, we are going to have to make some changes to the way things are delivered, whether that's where those things are delivered from a location perspective, i.e. things being done in a primary community setting rather than a hospital, whether that's being done via technology rather than face to face, and it's going to also require our staff to think differently about the way we work, where things that were previously done by doctors can be done by nurse consultants, and things that were done by qualified nurses could be done by support workers under supervision.

Some of those changes are not always the things that people would feel comfortable with or feel happy with, so, as you say, having those conversations early with both the staff involved but also the unions to help navigate those changes through is really important. And I think it's also having those dialogues, mutually, to understand the context within which we're operating because, like it or not, we do have a financial envelope within which we work, as does the Welsh Government, for healthcare provision, and it's about trying to balance expectations with the realities that we're all working with and seeing what we can navigate through to try and get the best outcomes for the population within the resources we've got available to us. Some of those things, obviously, for us as a health board are outwith our direct control. We don't control the national pay negotiations; those are done in partnership at a national level. But, locally, there are things in terms of managing local service change that we do have responsibility for, and, certainly within my organisation, our local partnership forum is the place where we have those conversations with our trade union partners at the table.

And I guess, more generally then, when you are redesigning services, how do you balance that use of external consultancy, because there are lots of different partners, for example, that you've mentioned, with the expertise of your own staff and trade union representatives as well? How do you navigate that, because changes can be difficult? Paul, you've just mentioned that there are lots of things, potentially, coming down the track that also could then impact those individuals who are looking to have a career in a particular field, because, equally, that depends on their study and what the study then looks like, and the universities have to adjust accordingly, so that's big, heavy stuff. How do you balance that external consultancy and advice versus the reality of the people actually doing the job? How do you get that balance?

I think what we try and do is test where we've got the assets locally. So, our first test will be have we got them within the organisation, have we got the skills and experience within our partners or our community. That's where we would always start. And sometimes we do, depending on what the issue is. I think where we've felt that we've needed external support is around digital, AI and tech, and where we can harness benefit from that, or where we can rapidly implement systems, or where we can learn what’s happening internationally, because it’s such a fast-moving field. Every health institution in the world is trying to grapple with that issue. So I think to imagine that we would have that within our organisation, or perhaps all of the knowledge within Wales, would probably be asking a lot. So, I suppose it depends a bit on the issue.

I think there’s a general principle, though, of involving staff whatever it is, so there will be a component of the harnessing digital, AI and tech where we absolutely need to be closely connected with our staff and our public’s views on this, because in the end, it’s got to land in the workplace. So, whilst we might not have the knowledge and skills to implement it, or we might need to learn from other places, intrinsic to it are the changes in the ways people will work in the future.

Like Paul, we’ve got an established partnership forum. I think we manage the relationship well with our trade union colleagues. It’s a really key relationship, as we have with Llais, with the public, and we find that works really effectively for us. I do think, though, it will test us going forward, given the amount of change we’re going to see from AI, digital and tech in the future.

And Paul, are you confident that we’re going to get to an endpoint now where we can resolve the situation in front of us and move forward?

It’s very much what we’re working towards. Hopefully, colleagues in Unite are also in a similar place.

Thank you.

Thank you. Anna, you had a quick follow-up.

I’ve got an additional question, but it’s not a direct follow-up.

Okay, we’ll move on to Alun. He’s been sat here quietly for the whole meeting so far.

Not surprisingly, I’m going to return to the industrial action and the health visitor dispute. I wonder whether the board have ever reflected on beginning a process locally and then reneging on that process, which is the basis for the dispute. I wonder whether the board has reflected on that.

Also, you’ve indicated that the current process is to identify those issues that are highest priority. From speaking to those striking health visitors, what they’re concerned about are those that we don’t know about, and I’m sure that that is something that concerns you as well. So, the unknowns are the difficulty, and because of the dispute, what we’re not seeing is enough of those families to identify the highest priority. Although you have assured, through the board, to the Minister that those safeguarding procedures are in place, how confident can we be that those safeguarding procedures are not going to leave us in a position where families and individuals are in a very difficult position?

It’s really important, I think, to remember that you can never completely safeguard, because safeguarding issues are by nature often things that come out where nobody was in contact with a family, and something awful was going on. So, you can never give complete assurance of that nature.

But what I can say is that, as I described, the measures we’ve put in place have been designed to enable the most at-risk children to be looked after and monitored closely, as well as putting in mechanisms for families who want to get in contact with us to raise a concern to highlight those concerns. And also, as I said, the conversations and discussion and engagement with local authorities, many of whose staff are going in and out of houses or meeting families routinely, are also a way of us picking up any particular issues. And clearly, there are other routes such as colleagues in primary care and GPs that will be seeing families and picking up situations. They have been briefed on how to raise any concerns that they may have. So, I think we have done as much as we can do within the resources we’ve got available to us during this time to put those things in place.

In terms of your first question about the board and the comment about reneging, you won’t be surprised to know that I don’t agree with that position. There was never an agreed job description. The board have been over this situation, and have had the legal advice from our lawyers. There was no job description, so there was nothing to renege on.

There was a process that was started, though, and the end of that process was never reached.

The job description was never agreed in partnership with us.

I think we're going to have to agree to disagree.

Yes, and therein is why we are in the position that we're in at the moment.

I'm conscious that we've got about 10 minutes of the session left, and I know I've got two other questions, plus a couple of follow-ups from myself as well. So, I'll go to Anna first.

Okay, a quick-fire one. Involvement has come up a couple of times, whether that's staff or public—especially public engagement or community involvement in designing services that meet their needs. Do you think the current focus on statutory requirements, like the consultation, is working? Do we need to rethink how we do this to genuinely co-design for communities' needs and what communities want?

Shall I answer that? I'll come in from my position in Aneurin Bevan, just reflecting in terms of the stages in there. So, we've reset our strategy, renewed our strategy, which is now called 'Gwent 35'. That was several months of going out to the community—community groups, formal groups, informal groups—to establish the direction of travel and the strategy we're aiming to reset. So, there was a hell of a lot of work done to establish that strategic intention and direction of travel. On top of that, in terms of the next level down, I guess, is how we then truly engage with service redesign. We've got statutory requirements, consultations, et cetera, a lot of work with staff as well, coming on to the previous question. We're also engaging with our public and patient representative groups, and, again, linking up through partnership groups in terms of redesigning predominantly the out-of-hospital lens, as well as acute services. So, I guess to answer your question, we are going further, and I'm sure other colleagues will describe similar things. We are going beyond the minimum, which I think is important, which I think was your question.

I suppose I'm just a bit concerned that sometimes there's the focus on the statutory, that consultation element, and maybe we need to—. There's an awful lot of engagement, but how effective is it really, when you ask people if they really feel that they're involved.

And then, my other one was just about looking over the three horizons. In the current difficult situation we are in, I think it sounds like lots of the health boards have got a good picture of where you want to be—much more community involvement, primary care, et cetera. But to what extent are you confident that you've traced out how you keep going now on those things and get that to that place that you want to be?

I'll let Mr Kloer have a go this time.

As you know, Anna, we've done a huge amount of engagement and consultation over the last couple of years on those eight clinical services, plus two GP practices, plus a community hospital. There's a huge amount of engagement we've undertaken, and we try to follow a bit of a discover, design and deliver process, so that we don't jump to a conclusion. And indeed, through the consultation process, it materially changed the outcome of the service decisions that we made at our board earlier this year. And, in fact, we went out to reconsult on stroke, following a different option that emerged through the consultation.

I would say that the approach does mean that we get really good feedback. We've got an engaged population, who are quite rightly concerned about the services that are local to them. It does take an inordinate amount of time. So, that's one of the issues. When we're trying to move to sustainability—just thinking of some of the other questions—if we're trying to make a change, if that process takes two years, as it has done, and we're still working on some of them, you can see why moving towards a more sustainable position takes quite a number of years. And that's only eight of our services. There are other unsustainable services.

Just the last thing: on your three horizons point, which we haven't mentioned today, if we look to the third horizon, and if we think about some of the challenges and opportunities facing the NHS, if we look forward, if we look towards 2044, that's peak mortality time, when we've got the largest number of older people alive in our areas, and all that will come with that. It's not that they're coming to end of life, it's more the fact that there will be the largest number of people with chronic conditions, end of life, dementia, all of that in place. So, if we think it's challenging right now—. It won't suddenly happen; it's a ramp towards it. Everything we're doing has to prepare for that in the way we run our community and primary care services.

But I would say digital, artificial intelligence and tech—look at the difference in the last year, let alone what we will see by 2044. So, there are huge opportunities there. And also, we do have a population that is around two thirds overweight or obese, and we have enormous projections around diabetes. So, when we're thinking about our plans for the future towards a sustainable system, we have to consider all of those things. I know all of the health boards will be planning, in their own ways, to try to tackle those. If we look at some of the programmes in Government around Community by Design, they're directly aimed at tackling some of those challenges.

Thank you very much. I'm obviously very conscious now of time. Iain, you've got a question you wanted to add.

Thank you, Chair. It's an important point of clarification for me—to Pete, if you wouldn't mind. Earlier, when I was asking you about savings, you said that you'd achieved your target for the last financial year. But according to the data I could find, you had a target of £23.1 million savings, but you accrued a one-off saving of £10 million and recurring savings of £10.2 million, so that comes to £20.2 million against the target of £23.1 million. So, that's £2.9 million short.

I think the gap was covered by other non-recurring actions.

It was, was it? Right. Okay. That's one for our research guys to go looking for. That's not come up on anything—

If you want me to send you something further to this committee, I'm happy to do so.

That would be helpful, if you could. Brilliant. Okay, thank you.

A quick one from Carrie.

I will try and be quick. Just going back to financial stability and the barriers to that, we've heard a bit about inflation, pay settlements, agency spend and so on, and I understand that every health board is different, but what I've not really heard, or at least I'm not clear after today, is why Cwm Taf can achieve that financial balance, whereas the other six can't, and exactly what's driving that. I'd really like to understand that a little bit better. Maybe it's not a good idea to ask that as the last question, but I'm just wondering, Paul, have you got anything else you'd like to add on that point?

It's hard. I can comment on my organisation. Colleagues have described their own organisations. Many of the challenges we all face are common, many of which have been described this afternoon. I think there are differences because some of this is history, some of this is legacy of where organisations have come from, and things that have been around for a while. Some of it is down to the configuration of the service models that different organisations have. I certainly think, in my organisation, my team and my finance director and others work very closely together on that assurance process, making sure we're delivering. I think our board are also very clear. We've had to make some difficult choices about where we want to invest in things or not invest in things, and we've had to say, 'Well, we'll do some of that. We can't do all of it. Some of it will have to wait till next year.' I think it's hard to compare and contrast, because, whilst there's a lot of similarity, everyone's organisation does come from a different place. But I think what you've heard today is a commonality in terms of the way in which those challenges are being approached and, hopefully, organisations moving towards that model.

Rob and my finance director and others will meet on a monthly basis to discuss where people are at and compare notes and share learning—there's a lot of learning that goes on between our organisations in terms of people who are doing things well. If somebody has been able to make a big impact on agency spend, people will talk about it and say, 'Well, how did you manage to do that? What did you do? Can we learn from that?' So, I wouldn't want people to go away thinking everyone's beavering away in their silos. This is very much a collective effort of everybody. So, whilst my organisation has delivered our obligation, it's very much on us also to work and share learning with other colleagues as we go forward.

That's the follow-on, isn't it—is there more, in terms of best practice, that we can be pulling out here that can be shared. Diolch.

Thank you. One last one from me, and then we'll be done. Obviously, it's going to be slightly worded differently for Cwm Taf, so, basically—. Are you able to give this committee a date by which you expect your organisation to be financially sustainable? And a slight twist on that for Cwm Taf: will you be able to continue to be financially sustainable? I'll start with—. We'll go from Pete and go right across the line.

So, our current route-map to sustainability is to get back to our target control total within a three-year period, with this being year 1 of that process. That's constantly being reviewed and actioned and updated, but that's the route-map for us.

Thank you. Mr Kloer.

So, for Hywel Dda, we have a similar process of route-map to financial sustainability, which is sort of three-and-a-half years, so we add on six months. However, as I've said earlier, I do think there are some structural elements to our deficit.

Thank you. Mr Holcombe.

So, similar to Pete, a three-year recovery plan—March 2029 is when we expect to conclude the delivery of that, and be sustainable beyond that.

Thank you. And Mr Mears.

So, our plan this year is a balance plan for this financial year, and we remain on track with that. And, obviously, we're waiting to see what the allocations bring for next year, but our ambition would be that we start from a premise of balance.

A quick one from Shav.

Yes, an important one. The former Auditor General for Wales qualified his opinion for 2025-26 since the renumeration for two interim directors exceeded the relevant pay bands approved by Welsh Ministers. How did this happen and what are the measures that you've put in place to stop that from happening again? It's something that comes up time and time again; the public ask these questions, WalesOnline talks about it all the time. You've got an opportunity to give us some sort of an answer today, hopefully.

This was our situation, so just to clarify: these were two vacancies, so two of my executive team left during the year. It wasn't interim people in the context of people coming in from outside, these were their deputies who acted up for a period of time until the new person who was appointed came into post. So, they acted into those jobs. Those jobs had been evaluated by Welsh Government and approved by Welsh Government at a particular renumeration level, which had gone through our renumeration committee as well. There was a misunderstanding that the evaluation related to the person, not the post. So, we appointed the person presuming that that post was evaluated at that level, but we were rectified by Welsh Government that the previous authorisation had been for the person, not the post.

So, that was why there was not an approval for those two renumerations, which lasted a matter of weeks and equated to £11,000. We're a £1.7 billion organisation, so in the context of our overall budget, yes, it was—. In terms of audit, it was an issue, but in terms of your question about learning, the process for our renumeration—. We've rewritten our policy with the renumeration committee now to make sure that everyone understands that difference in terms of evaluating a post versus evaluating a person, and that's been run through our renumeration committee to make sure it doesn't happen again.

Thank you.

A follow-up very quickly from that—has that £12,000 been recovered?

It's not been recovered, no.

Why not?

Why not? Because it wasn't the individual person's error of making that mistake, so it would be unfair, in our view, to penalise the individual person.

So, just to be clear, then, Cwm Taf's policy from now on is that if you make an error in somebody's salary, you will not be recovering that. From a porter—

No, I'm not—. This is relating to executive pay, which is subject to separate terms and conditions through our renumeration committee than the 'Agenda for Change' regulations for other roles. It's reviewed on a case-by-case basis.

So, going back to Alun's point, I guess, when it comes to other staffing, then you will deal with it on a case-by-case basis.

These things are always reviewed on a case-by-case basis. Where we have situations where there are overpayments, they are often reviewed and arrangements are made with that individual depending on their circumstances.

Right, okay.

Okay. Thank you very much, everyone. That brings the evidence session to a close. I thank the panel for their attendance this afternoon. As usual, there will be a copy of the transcript so you can check for factual accuracy in due course. So, thank you very much to the panel.