An £82 million improvement and transformation grant for Betsi Cadwaladr University Health Board (BCUHB) could be at risk if the organisation fails to close its funding deficit.

Less than halfway into the fiscal year the health board is reporting a £13.6m financial deficit. It is also facing increased running costs for services including out-of-area mental health provision which are driving a further £40m of risk.

The board is also facing exposure to an uncapped level of financial risk from any legal action taken against it after it was revealed that the Welsh Risk Pool – which supports all health board with costs in the event of legal action – does not have enough funds to cover its current costs, meaning health boards across Wales must pick up the tab for tribunal costs or damages.

Despite the deficit, BCUHB continues to forecast breaking even. Failure to deliver on its financial plan will see the authority potentially lose an £82m grant from Welsh Government for improvement and transformation.

The non-recurring money has been paid this year but if the board fails to hit its financial goals, it may not be renewed for 2026/27.

BCUHB has overspent by on average £2.35m each month since April. For the remainder of the financial year it needs to underspend by the same amount per month in order to achieve break even.

Reacting to the finance report Paolo Tardivel, BCUHB’s Interim Director of Transformation and Strategic Planning, said the board was incurring additional costs due to the challenges that had stacked up.

By improving bottlenecks in healthcare provision, such as patient flow in and out of hospital, he said that unnecessary overspending would be significantly reduced.

“We’re treating the symptom and it’s the cost of failure because the patient flow isn’t working,” he said.