Health bosses in Wales are facing a £87.5 million budget hole, Wales Online has revealed.

The shortfall at Cardiff and Vale University Health Board, which wants to become a “flagship” organisation with a reputation for “excellence and innovation”, emerged as chiefs outlined their spending plans for the coming year.

Most of the sum - around £74.6 million - comes from “unavoidable” commitments like pay, the impact of inflation and the return of the 17.5% VAT rate, Paul Hollard, the board’s executive director for planning, told Wales Online, adding that a challenging year of tough cuts lay ahead.

“The issue is that we would certainly spend more than we are allocated if we do not change anything,” he said.

“Some of this change will result in improved services, not poorer services. If you look at the best healthcare systems in Europe, high quality services result in less spend - that’s what we are trying to do. But it will be a challenge.”

Reports have suggested that some of the money will have to be recouped through changes to health priorities over the next year.

The operational plan of the university health board (UHB) states: “The UHB is undertaking further work to prioritise service requirements to take full account of the required efficiency improvements.

“Notwithstanding this further work, the UHB will need to ensure that its saving plan and cost containment measures deliver £74.6m to offset/manage unavoidable expenditure requirements.

“Further savings will be required if we were to proceed with all investment priorities and local developments.”

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