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What is the cost?

We looked at the accounts of the NHS in Wales to do some high-level analysis of the cost of primary care. We plan to look at this issue in more detail in future audit work.

Total cost of primary care

In 2016-17, the accounts of the NHS in Wales show that health boards spent £1.39 billion on primary care services. The chart below shows further detail on how that money was spent.

Trend in health board spending

  • Between 2010-11 and 2016-17, health boards’ spending on primary care services increased 4% from £1.34 billion to £1.39 billion.
  • However, after taking into account the effect of inflation, this represents a real terms reduction of 5%.

Primary care spending as a proportion of total health board spending

  • Between 2010-11 and 2016-17, total health board spending in Wales (Net Operating Costs) increased from £5.39 billion to £6.32 billion.
  • However, over the same period, recorded spending on primary care as a percentage of total health board spending in Wales (Net Operating Cost) reduced from 25% to 22%.
  • This would suggest that the shift in resources towards primary care that has been at the centre of much of the NHS policy in recent years is not being achieved. However, the picture is complicated by the fact that expenditure by health boards on primary care is not consistently categorised and as such it is likely that the figure recorded in the accounts does not represent the totality of primary care expenditure.

Funding from Welsh Government

  • The Welsh Government allocates money to local health boards to spend on primary care services. In 2016-17, the allocation was around £887 million.
  • This covers General Medical Services, Pharmaceutical Services, General Dental Services, the National Primary Care Fund, as well as funding for a range of optometry services and some aspects of primary care prescribing and dispensing.
  • The allocation does not cover funding that community pharmacies receive indirectly as ‘retained purchase profit’. This is the profit that pharmacies retain when the NHS reimburses them for the costs of purchasing medicines.
  • The allocation for General Medical Services is ring-fenced, meaning health boards should spend their entire allocation on General Medical Services. In 2016-17, the health boards spent 2.4% more than their allocation for the General Medical Services contract. However, not all of the General Dental Services allocation is ring-fenced and in 2016-17, health boards spent 6.4% less than their General Dental Services allocation.

Primary care premises

  • In October 2017, the NHS Wales directory showed there were 596 GP premises (including satellite practices), 428 dental practices, 448 private opticians and 717 pharmacies. Some of these properties are part of the NHS estate while others are privately owned.
  • Our scoping work revealed some problems in Wales with a lack of physical space in current primary care buildings, such as GP practices and primary care health centres. This could make it more difficult to bring in new ways of working, such as introducing new clinics for physiotherapists, clinical pharmacists etc.
  • Data is not available on the condition of the primary care estate so the costs of backlog maintenance are not known.
  • In 2017, the Welsh Government announced a £68 million investment [opens in new window] to build 11 new ‘hubs’ and GP centres, and improve 8 existing health centres, to be delivered by 2021.
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