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Last Updated: Thursday, 9 November 2006, 14:15 GMT
NHS slipping into deficit again
Hospitals are responsible for a large part of the deficit
The NHS is slipping into deficit once again as hospitals and local community services struggle to balance the books.

The Department of Health is predicting a 94m shortfall by the end of the 2006-07 financial year, compared to an 18m surplus just three months ago.

Hospitals and primary care trusts, in charge of community services such as GPs, are racking up the biggest debts.

But the they are being bailed out by reserves being built up by regional health chiefs in England.

Hillingdon PCT (London) - 65.6m
Queen Elizabeth Hospital (London) - 37.1m
Whipps Cross University Hospital (London) - 33.2m
Hinchingbrooke Health Care (Cambs) - 29.9m
North West London Hospitals - 29.7m

Strategic health authorities (SHAs), which oversee NHS trusts, have used money from central budgets such as training and public health, as well as taking some of the extra 5.4bn funds earmarked for the health service this year.

Hospitals and PCTs finished last year nearly 1.07bn in deficit, leaving the NHS in the red by over 500m once surpluses made elsewhere were taken into account.

That deficit was paid off by cuts made to this year's budget.

But the half-year forecasts show that the NHS still looks like it is racking up deficits despite government promises it would balance by the end of this financial year.

Hospitals and PCTs are forecasting a deficit which is almost exactly the same as last year - 1.01bn - amid the wave of job losses and hospitals cuts happening across the NHS.

And this is despite the fact the number of financial hit squads - known as turnaround teams or directors - helping NHS trusts has increased from 18 at the start of the year to 143.

However, the overall deficit is predicted to be 94m as a contingency fund of 350m has been amassed by SHAs, who themselves are predicted to end the year 569m in surplus.


Shadow health minister Stephen O'Brien said: "Labour's mismanagement has put our NHS in this financial mess.

"Now we see that, despite all their warm words and promises, not to mention extra millions spent on turnaround consultants, Labour are failing to solve the NHS cash crisis."

Dr Beverly Malone, General Secretary of the Royal College of Nursing, added: "These figures confirm our worst fears.

"They are clear proof that we need a long-term plan to tackle the deficits crisis as a matter of urgency. If not, services will continue to be hit, jobs will continue to be lost and patients will continue to pay the price."

But the Department of Health said it was confident financial balance could be reached by the end of the year, adding SHA's had identified 100m of savings that could be made although these had still to be fully confirmed.

NHS chief executive David Nicholson added: "Despite these financial challenges, the NHS continues to treat more people than ever before with shorter waits, particularly in areas such as cancer and A&E.

"For those organisations where insufficient improvement has been made, action plans have been agreed with SHAs to ensure that financial performance is improved in line with local plans."

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