LONDON (Reuters), Jun 7 - The National Health Service underspent its budget by 510 million pounds last year, fulfilling a government pledge to avoid a third year in the red but provoking a row over the level of cuts implemented.
Health Secretary Patricia Hewitt, who unveiled data for the 2006/07 financial year in England on Wednesday, had said she would quit if the NHS fell into deficit again.
But the record size of the unspent funding angered NHS staff unions who said the money could have gone toward pay rises while doctors' leaders at the British Medical Association said cuts in services had been excessive.
In February, the Department of Health said the NHS was on target for a small surplus of 13 million pounds for 2006/07 on its vast, 70 billion pound budget.
"If I hadn't taken decisive action to deal with the overspending, the NHS deficit would have doubled again this year," Hewitt said.
NHS managers will receive nearly 10% more funding next year and expect to achieve another surplus of around 400 million pounds
Hewitt said the surplus did not mean an agreed upon salary increase for NHS staff and nurses would be paid in one go.
She said a decision to phase-in the 2.5% rise had been taken to protect the economy from the threat of high inflation and was unrelated to the NHS's financial health.
Unison General Secretary Dave Prentis said: "This money gives the government the opportunity to pay up and avert the growing reality of industrial action in the NHS."
A fifth of NHS organizations still failed to balance their books, a reduction from a third the previous year.
Together they amassed a combined deficit of 911 million pounds, itself down from 1.3 billion pounds previously.
To balance their books, many hospital trusts have been forced to freeze posts, close wards, and delay nonurgent operations. Budgets for medical training and public health campaigns have also been raided.
There were 2,330 compulsory redundancies, mainly of nonclinical staff, and thousands more posts were frozen.
Headcount during the year fell by 17,390 out of a total workforce of more than 1.3 million.
But the government said the NHS had employed 3,267 more doctors and 526 full-time permanent nurses, with 15,243 fewer administrative staff.
The Conservatives said the NHS had suffered "immense damage" in pursuit of Hewitt's surplus target.
They said 9,000 beds been closed, operations had been delayed in half the country and over 6,000 newly qualified health professionals could not find NHS work.
Doctors, too, have been highly critical.
"The current cuts have been excessive," the British Medical Association's Jonathan Fielden was telling consultants at a conference on Wednesday.
"It is clear ... that the Department of Health, under Treasury zeal, has cut too far, been too aggressive."
The NHS Confederation, which represents 90% of NHS organizations, said the surplus was small compared to the service's vast budget and should perhaps be larger.
"Five hundred million pounds is less than half of 1% of the entire NHS budget and so actually allows for a very small amount of flexibility in NHS organizations' budgets," said Gill Morgan, the confederation's chief executive.
By Tim Castle
Last Updated: 2007-06-06 10:00:27 -0400 (Reuters Health)
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