Government is 'losing control' of NHS finances

The Government has abandoned its goal of balancing the NHS books over the coming year, the Conservatives claimed today.

Shadow health secretary Andrew Lansley said he had received a letter showing that NHS Trusts were no longer to be required to wipe out their deficits by the end of this financial year in March 2007.

Instead, he said, Health Secretary Patricia Hewitt had told him the trusts would have to achieve a month-by-month financial balance by that date.

Mr Lansley warned that the change meant the Department of Health was losing financial control of the NHS, with the danger that the job cuts and ward closures seen at the end of the last financial year may be repeated.

He told the BBC Radio 4 Today programme: "In January the Government's objective was that in this financial year, running to March 2007, the NHS would recover the deficit from the year just ended and plan for a surplus, and each individual organisation was required to plan for an in-year balance this year to recover its previous deficits.

"I have received a letter in the last few days from Patricia Hewitt, who tells me that in-year balance in 2006-07 is going to be interpreted as balancing monthly income with monthly expenditure at the end of the year.

"What she has done in the space of the last three months is shifted from a position where the NHS was going to be required genuinely to restore financial balance this year to one where the deficits could well be accumulating again during this financial year and spilling over into 2008.

"There is a real problem about this, this isn't just accounting.

"What it means is that the Government have abandoned their objective of achieving financial balance this year.

"We can see what happens when financial control is lost - we have seen it in the last three months with 13,000 job losses being caused across the NHS and, I regret, undoubtedly more to come and it will manifest itself in service reductions.

"We have seen already how mental health services are having to be cut back in order to try to compensate for deficits elsewhere.

"We are seeing it in community hospitals being shut. We may well see more hospital closures being announced in the next few days.

"That's what happens when you lose financial control."

Mr Lansley said he would seek to bring the Government to account on the issue with questions in Parliament today.

Copyright Press Association 2006.