Our audit of NHS bodies’ 2024-25 accounts showed that all seven health boards again breached their statutory duty to break even, raising further questions about the financial sustainability of the current system.

The Auditor General has concluded that the 2024-25 accounts of the twelve NHS bodies present their financial positions fairly. However, all seven health boards failed to meet their statutory duty to break even over a three-year period. As a result, the Auditor General qualified his regularity opinion for those bodies as failing this duty means that the bodies have exceeded their authority to spend. The three NHS trusts and two special health authorities all met their duty to break even.

Health services in Wales received £11.57 billion of revenue funding in 2024-25, a cash uplift of £927 million. This was significantly higher than the uplift of £744 million in 2023-24. The 2024-25 cash uplift equated to a 4.5% real terms increase in funding (compared with a 1.2% real terms increase in 2023-24). But against a backdrop of significant demand, the annual deficit of NHS Wales improved by £60 million. Despite this, the three-year cumulative over-spend across the NHS increased from £385 million in 2023-24 to £461 million in 2024-25.

Expenditure on agency staff has reduced, reversing steady growth from 2018-19 to 2022-23. Expenditure of £174 million across NHS Wales in 2024-25 was 46% lower than in 2022-23. While the majority of this spend (72%) continues to cover workforce vacancies, approximately 14% of agency expenditure supports additional activity to help meet demand.

NHS bodies are having to deliver significant levels of savings in their attempt to contain costs. Reported savings increased again in 2024-25, continuing the trend from 2022-23, and at £253 million, are at the highest level since 2018-19. The NHS still relies heavily on one-off non-recurrent savings with 38% of total reported savings in 2024-25 falling into this category. Positively, however, this percentage has reduced again from 2023-24 and from 60% in 2022-23. In June 2025, we published a summary of headline messages from more detailed audit work looking at NHS Cost Savings. 

Sound strategic planning is key if the NHS is to deliver services which are clinically and financially sustainable. However, only one of the health boards was able to secure approval from the Cabinet Secretary for Health and Social Care for a three-year integrated medium-term plan for 2024-27. Medium term plans prepared by the three NHS Trusts and two special health authorities were approved by the Cabinet Secretary, but in general it is proving increasingly difficult for NHS bodies to produce financially balanced plans in the current climate of cost pressures and service demand.

Within the current system, a failure of an NHS body to produce a financially balanced three-year plan typically results in a reversion to a one-year plan. Although the need to demonstrate in-year financial balance is understandable, it risks perpetuating a focus on the short term at the expense of a longer-term plan. That longer-term view needs to include a greater focus on preventing illness which can have significant cost and outcome benefits to the NHS such as those highlighted in our work on Cancer Services in Wales.

Further detail is set out in our NHS Wales Finances Data Tool 2024-25 published today.