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Last Updated: Monday, 11 December 2006, 00:50 GMT
NHS 'must make surplus next year'
The NHS' first target is to balance the books this year
The NHS in England has been told it must achieve a £250m surplus next year.

The service ended the last financial year £512m in deficit, but Health Secretary Patricia Hewitt has pledged to balance the books this year.

However, the latest predictions are that the NHS will have a £94m shortfall this year.

NHS chief executive David Nicholson also set out new targets for tackling hospital infections and meeting the 18-week waiting time target.

In November, Ms Hewitt told the Health Select Committee she would take "personal responsibility" for bringing the NHS out of deficit.

Historical deficits

However hospitals and primary care trusts - in charge of community services such as GPs - in particular have already been found to be building up big debts.

In the next financial year, the NHS should expect to make a financial surplus
Health Secretary Patricia Hewitt

But Ms Hewitt told the BBC's Today programme: "By the end of March next year, we will have the NHS as a whole in financial balance.

"So in the next financial year, the NHS should expect to make a financial surplus."

Ms Hewitt said many hospitals could address their deficits by increasing the number of operations they carried out on a day-case basis, saving beds and sometimes requiring fewer staff.

"If every hospital was doing as well as the top 25%, over day case surgery and length of stay, the NHS would realise over £2 billion to invest in other services and new drugs."

Responding to a report in the Guardian newspaper claiming around a dozen trusts are "technically bankrupt" and would be unable to break even, the health secretary accepted there were some trusts where the deficit was so high, they would not be able to balance the books in one year.

But she said they would be asked to balance the books each month and, when the NHS as a whole was back in balance, the government would look at changing the way the accounting system addressed debts built up over previous years.

However, NHS managers said it wanted to see the accounting rules change now as they meant trusts paid a "double deficit" - the amount of the deficit is reclaimed from the following year's budget but the original deficit is also carried forward.

Cases increasing

There are concerns that the need to drive down deficit levels, rather than a desire to improve services, are fuelling some of the changes currently taking place in the NHS.

At this current time, the NHS is under intense financial pressure, which is directly impacting on patients
Jonathan Fielden
British Medical Association

Dr Jonathan Fielden, chairman of the BMA's consultants' committee said: "Whilst it may be good business practice to have a financial surplus, the NHS will struggle to meet the challenge at a time when hospitals are already cutting back on patient services.

"Financial management in the NHS does need to improve but it does not make sense to ask trusts to jump through yet more hoops and risk damaging patient care even further."

Shadow health minister Stephen O¿Brien said: "The calls for a £250m surplus show their desperation for a slush fund to bail out trusts in difficulty and to safeguard ministerial careers.

"Ministers do not seem to care that such a fund that will be paid for by cuts to frontline services."

Liberal Democrat health spokesman Steve Webb said: "The government has gone into target overdrive.

"How can hospitals already at financial breaking point be expected to chase new targets while trying to dig themselves out of the cycle of debt imposed by Labour's 'Alice in Wonderland' accounting rules?"

NHS trusts will also be told on Monday that 85% of inpatients must receive treatment within 18 weeks by March 2008.

All patients should be treated within that time by the end of the year.


The Department of Health will also announce hospitals can bid for a share of £50m to help control infection rates, particularly Clostridium difficile.

In addition, hospitals will have to set local targets to keep infection rates low.

C. difficile is a common hospital-acquired infection which usually causes diarrhoea but can lead to fevers or more serious infections.

Cases of C. difficile are increasing, rising by 17% in the over-65s from 2004 to 2005.

Patricia Hewitt on the future of the NHS


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