Welsh NHS 'risks £131m deficit by 2013'

The report predicts the NHS deficit for this year is likely to be £70m Credit: ITV News Wales

There are fears tonight of a fresh round of cuts in the Welsh health service after a damning report revealed the scale of NHS overspending. The deficit for this year alone is likely to be nearly £70 million - and could be a lot worse.

The Auditor General for Wales is warning that health bosses need to make tough choices on workforce costs and bring in a "realistic short term savings plan".

Our health correspondent Mariclare Carey-Jones reports:

This update report shows that NHS bodies have struggled to manage within their current resource limits in the first half of the year. It is likely that there will be a significant deficit by the end of the year. NHS bodies are making progress with their savings plans, but this is clearly not sufficient. Overspends in key areas like pay and medicines suggest NHS bodies are struggling to contain cost pressures. The NHS in Wales will be facing difficult choices and challenging times and will be giving evidence in PAC.

The Welsh Government has issued this statement in response to the Wales Audit Office report.

The Welsh Government is very aware of existing and future potential financial pressures on the NHS and is currently undertaking a mid-year review to chart the progress of the health boards' financial position. NHS organisations are making significant progress on delivering savings. We will continue to work closely with all NHS organisations in monitoring and scrutinising the financial position on a continuous basis, with a view to ensuring that health boards will break even at the year end.