NHS finances in good order, insists Milburn

The National Health Service's finances are in perfectly good order despite a predicted deficit of more than £200 million this year, Health Secretary Alan Milburn insisted today.

The National Health Service's finances are in perfectly good order despite a predicted deficit of more than £200 million this year, Health Secretary Alan Milburn insisted today.

"Any talk of financial turmoil in the National Health Service couldn't be further from the truth," he said.

His comments followed publication of a survey by health service financial managers which estimated the large shortfall within NHS trusts and health authorities this year.

Pay pressures, millennium costs and implementation of the EU working time directive have all contributed to the deficit, the report by the Healthcare Financial Management Association (HFMA) found.

Predictions for next year were no better, with a number of unavoidable cost pressures, including increases in expenditure on pensions and drugs forecast by the survey.

Although HFMA chairman Eric Morton said the amount in question was only 0.5% of the overall NHS budget, the shortfall could affect services, including attempts to reduce waiting lists.

"That may mean having to slow down on some developments which we would like to put in - they may have to come in a little bit later," he told BBC Breakfast News.

"That may be extending new services, developing additional outpatient services, and possibly even impact on our ability to hit the waiting list targets that we signed up to, to which we are all committed."

But Mr Milburn said that the Government had given "the biggest cash injection in the history of the NHS", having inherited a health care debt of almost £500 million from the Conservatives.

"I don't pretend that everything in the garden is rosy, because it isn't, but what we have been doing is laying the foundations for modernisation," he told BBC Breakfast News.

He said Labour was creating "a fast NHS and also a fair NHS", and was making "very good progress" towards manifesto commitments on waiting lists.

Shadow Health Secretary Dr Liam Fox said the HFMA survey, which covered 59% of health authorities and 48% of NHS trusts in England, showed that ministers were "clearly incompetent".

"Numerous health authorities are telling us that the sheer pressure on them to get waiting lists down, to try and achieve the Government's target ... is costing them an awful lot of money," he said.

Mr Milburn responded that the only option offered by Conservative policies was forcing more patients to use private health care, "which for the overwhelming majority of people in this country simply is not an option".

He added: "The other way, which is our way, is to properly fund the NHS but to make sure that it modernises too, that it performs better, performs faster, we get more doctors and nurses back into the NHS, which is what is happening, that we ensure that there's a new emphasis on the treatments that work rather than treatments that don't."