A hospital bed surrounded by glowing monitors and drips.

A hospital bed surrounded by glowing monitors and drips.

Health and social care face the “cost of operating challenge”

Published 15/11/2022   |   Reading Time minutes

There is significant concern about the impact of rising energy bills on the NHS and social care in Wales, and how this will affect service delivery.  

Alongside energy costs, other items such as equipment, food and fuel are becoming more expensive for health and care providers.

While many homes and businesses will be aiming to reduce their energy use, health and care services often require round the clock heating, lighting and equipment to function.

Without a funding increase to cover this shortfall, health and care services will have less to spend on other areas. As the NHS Confederation said:

Simply put, money spent on rocketing energy prices is money that cannot be spent on patient care.

The Director of Public Health at Cwm Taf Morgannwg Health Board described the pressures facing the health service as the 'cost of operating challenge.’

This article looks at the severity of the cost of living pressures facing health and care services, and the likely consequences.

Other articles have focused on the pressures facing unpaid carers and disabled people that access care. Senedd Research have also published a guide on help and information with the cost of living.

What are the issues?

Welsh NHS

The NHS in Wales is expecting its energy costs to more than double over the winter months and into next year. Four of the seven Local Health Boards are anticipating a rise of more than 200% in the next year.

The Welsh NHS Confederation said:

The increase in prices will have a detrimental impact on people's health and wellbeing and demand on the NHS's services, and it will have an impact on the NHS's finances.

The Health Minister recently stated that the NHS in Wales is facing an extra £207 million in energy bills this financial year.

Senior acute lead at NHS Confederation, Rory Deighton, said:

…the gap in funding from rising inflation will either have to be made up by fewer staff being employed, longer waiting times for care, or other areas of patient care being cut back.

This comes at a time when the Welsh NHS is already facing a waiting times backlog.

Adult social care

The Five Nations Care Forum (comprising of care associations from Scotland, England, Wales, Northern Ireland and the Republic of Ireland), is calling for urgent intervention in the energy crisis in social care. It said “the current energy crisis presents a very real threat to the sustainability of social care delivery”, and:

Social care and support providers are facing eye-watering increases in excess of 400% in their energy costs, both gas and electricity costs, which is simply unsustainable. The current energy crisis comes at a time when the sector is experiencing the worst workforce pressures the sector has ever known.

There are reports of care homes having to reduce staffing levels; reduce the quantity and quality of food provided; and increase their fees for residents to cope with high energy costs. 81% of care homes in an ITV survey said they would have to increase fees for residents, between 5% and 15%. The care sector is said to be facing "a perfect storm of significantly higher costs, squeezed fees and a lack of staff".

According to the Five Nations Care Forum, the huge increases in energy bills have led to many care homes closing, and homecare organisations handing back care packages and having to refuse new business. The Forum said that without assistance and funding, the rising costs will lead to many more care providers shutting down and ceasing the delivery of care.

For people being supported to live at home, our recent article highlights the fact that high petrol costs are causing homecare workers to leave the sector, making staffing shortages worse.


Hospice UK warned that hospices are facing an increase of £115 million in yearly costs.

Tŷ Hafan children’s hospice in Sully, Vale of Glamorgan, supports 300 children with life-limiting conditions and their families. The charity said it’s been hit with a £500,000 annual increase on its energy bill.

Other hospices reported up to seven-fold increases in their energy prices, and hospice leaders have warned they may have to reduce or close their services altogether due to untenable costs.

What are governments doing to help?

On 21st September, the UK government announced the Energy Bill Relief Scheme, which caps energy prices for non-domestic energy users, including hospitals, care homes and hospices, for 6 months (ending on 31 March 2023). It has said that support beyond this date will be targeted at the most vulnerable organisations, and will be informed by a review led by HM Treasury.

Health and care leaders welcomed the support, but raised concerns it would not be enough to relieve the pressure of energy costs on health and social care service budgets, and that it does not allow for longer term planning.

The Welsh Health Minister said the energy rebate from the UK Government still left a deficit of £100 million for the energy costs of the Welsh NHS.

Tŷ Hafan said the energy price cap had reduced their bill increase to £300,000.

The Deputy Minister for Social Services said the Welsh Government had increased its annual hospice budget by £2.2 million. Julie Morgan MS said Welsh Government was working with Tŷ Hafan and other hospices to better understand the financial challenges they are facing, and to see what it can do to help.

What lies ahead?

There’s no doubt that health and care providers are facing extremely difficult financial situations this winter and beyond.

There is also anxiety about what will happen in the Spring, with the relief scheme due to finish at the end of March 2023. As Hospice UK noted, the UK Government has not yet set out how services will be supported with energy bills after this date. Tŷ Hafan said:

Six months gives us a bit of a stay of execution and we are determined to keep our doors open but it’s really, really challenging.

The Welsh NHS Confederation reported that “health boards across Wales could see a tripling of gas and electricity costs in the next financial year”. And the Health Minister said that running the NHS in Wales next year without extra funding from the UK government will be "hell on earth."

Article by Bonnie Evans and Amy Clifton, Senedd Research, Welsh Parliament

Senedd Research acknowledges the parliamentary fellowship provided to Bonnie Evans by the Medical Research Council which enabled this Research Article to be completed.