LONDON (Reuters), Dec 12 - The government vowed on Monday that the National Health Service would clear its deficit and return a financial surplus next year.
However, Health Secretary Patricia Hewitt pledged that by the end of this financial year the NHS would balance its books and would then seek to make a small surplus in 2007-2008.
"We will have the NHS back into financial balance by the end of March next year," she told BBC radio.
Critics say the emphasis on finances has led to job cuts and reduction in services, which has affected patient care, and the Department of Health has warned that some hospitals or services may have to close to reduce the deficit.
NHS Chief Executive David Nicholson told reporters he was "absolutely confident" the health service would achieve balance by the end of the current financial year.
In the following year the NHS would have a target of achieving a surplus of at least 250 million pounds, when the budget would have risen to over 90 billion pounds.
Even though this surplus would only be around a quarter of a percent of the NHS's overall budget, it was needed to give the service "financial headroom," he said.
Nicholson, setting out the priorities for the NHS next year, said there would be an extra 50 million pounds available to reduce the amount of hospital-acquired infections.
In July, the Audit Commission recommended the NHS abandon an accounting system -- called Resource Accounting and Budgeting -- that effectively doubled the deficits of hospital trusts in the red. But Nicholson said trusts had first to show they could balance their books this year before the NHS could consider changing the accounting method.
Hospital trusts in the greatest difficulties would at least have to achieve a monthly balance of income and expenditure, with historic deficits dealt with at a later date.
Jonathan Fielden, chairman of the British Medical Association's consultants' committee, said patient treatment was being delayed in order to meet targets while doctors and nurses were unable to find jobs.
"At this current time the NHS is under intense financial pressure which is directly impacting on patients," he told the BBC. "While it is good to produce a financial surplus, surely these aspects need to be sorted first?" he said.
The Guardian newspaper also reported on Monday that at least a dozen NHS hospital trusts were technically bankrupt with no chance of balancing their books.
Hewitt admitted some hospitals would be unable to reach financial equilibrium by next year. But she said tight financial targets would pressure hospitals into making more efficient use of their resources, such as by increasing the number of day cases, and allow more spending in other areas.
Last Updated: 2006-12-11 11:28:53 -0400 (Reuters Health)
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