NHS has '£500 million budget surplus'

The NHS had a budget surplus of more than £500 million during 2006-2007, the government has announced.

The balancing of the books was achieved by a series of service and job cuts, extra cash due to the service being held back and the switching of funds from training budgets.

However, 22% of NHS organisations are still in debt.

Health Secretary Patricia Hewitt said: "If we hadn't taken decisive action to deal with the overspending, the NHS deficit would have doubled again this year. Instead, the NHS has a fairer and more transparent financial system than ever before. The minority of over-spenders know they have to put their own house in order instead of expecting SHA trusts to bail them out.

"The NHS is now in a strong position to make best use of the extra £8 billion it is getting this year. This will help pay for new drugs, make waits even shorter, treat an extra 800,000 patients, perform an extra 300,000 operations, tackle hospital infections and deliver more personalised care to patients."

However, Conservative Shadow Health Secretary Andrew Lansley said: "Labour knew they had to bring the NHS back into the black. But instead of tackling the underlying problems of unfair funding and rising costs, ministers went for indiscriminate cuts.

"Cutting education and training and plundering public health is not the way to manage the future of our NHS. No other business would be run on boom and bust and neither should the health service.

"The NHS has been financially mismanaged by Labour to such an extent that services are being restricted. Patients were told that they couldn't have operations until the end of the financial year; 38,000 NHS jobs have been lost, PCTs have had their budgets cut to pay for others in deficit and almost 9,000 beds have been closed.

"Yet Labour parade this surplus as a good news story. Well, it is not good news for NHS staff and patients who will inevitably pay for it in the years to come."

Mr Lansley's comments were echoed by Liberal Democrat health spokesperson Norman Lamb who said: "The NHS has clawed its way out of overall debt, but at what cost? Tony Blair's true legacy on the NHS is one of boom and bust - two steps forward, one step back.

"Over the past year, trusts have made harsh cuts to staff and services and raided training and mental health budgets to meet the government's political deadline of breaking even this year.

"This problem is far from over. There is still a gross deficit of over £900 million, with a fifth of organisations in the red. The government has also now admitted that 17 trusts are in such heavy debt that they could not afford to repay government loans.

"With the extra health spending set to end next year, what further cuts will be made? How much more will patients have to suffer?"

(KMcA/SP)