Hewitt U turn as she breaks her NHS finance promise

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 had pledged to balance the books this year. However, the latest predictions are that the NHS will have a £94m shortfall this year. In January and again in November, Ms Hewitt told the Health Select Committee she would take "personal responsibility" for bringing the NHS out of deficit.

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

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.

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 (and reported by Health Direct) 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.

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

"There are patients who could be treated quicker being delayed, jobs being frozen, trained doctors and nurses and others not finding jobs to go to while the NHS tries to get its finances sorted.

"While it is good to produce a financial surplus, surely these aspects need to be sorted first?"

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?"

On Jan 30, 2006 Health Direct in "Your money not your life- Hewitt puts money before medicine Patricia Hewitt, the health secretary, called for the end of the "handout culture" in the NHS and demanded that financial management be put ahead of clinical objectives.

The health secretary issued the "Business Arrangements" manual explaining how NHS finances should be controlled during 2006/7, when her reforms are due to create unprecedented instability in the service. She said: "Excellence in financial management is the prerequisite for high quality sustainable services."

The rulebook made it clear that strong financial management has moved from the bottom of Ms Hewitt's list of priorities to the top.