THE NHS is heading for a deficit of more than £600 million this year, the Government said yesterday.

Predictions of a deficit this early in the financial year are unprecedented, indicating how serious the situation has become. Patricia Hewitt, the Health Secretary, said: “I have made the decision to publish the data because I want to make it clear that inefficiency and poor financial management are not acceptable.”

Hospitals and primary care trusts are being put under intense pressure to balance their books. It is embarrassing for the Government that the NHS runs at a deficit after a period in which it has been given huge budgetary increases.

Andrew Lansley, the Shadow Health Secretary, said: “NHS finances are spiralling out of control — the net deficit has more than doubled since last year . . . Patients will bear the brunt of this financial mismanagement as frontline services are cut to balance the books.”

Ms Hewitt published the figures in a written ministerial statement, which also announced that “turnaround teams” of financial and management experts would help to address the problems.

She emphasised that most NHS trusts, primary care trusts and strategic health authorities were managing their budgets successfully. At the same time last year, she said, the forecast was for a deficit of £499 million. The actual outcome was about half that.

NHS managers had told the Health Select Committee that the new contracts for consultants and GPs had cost almost £400 million more than expected. Agenda for Change, which deals with pay arrangements for other NHS staff, was also over budget, although by “nowhere near” the £900 million that has been reported.

Sir Nigel Crisp, chief executive of the NHS, said that he expected the figure would be reduced to £200 million by the end of the year. Richard Douglas, NHS director of finance, said that there was always a “degree of pessimism” within trusts at certain times of the year.

Paul Burstow, MP, a Liberal Democrat member of the committee, said: “The Government’s approach to reducing the deficits is to take even more money away from those local organisations in the red. This will be a recipe for chaos and cuts in local services.”

Jo Webber, of the NHS Confederation, which represents more than 90 per cent of organisations in the health service, said that it was sensible to agree a planned deficit of £200 million with strategic health authorities for this year. “We should not lose sight of the fact that NHS organisations and their staff are delivering real improvements in patient care — and most are doing that within budget,” she added.

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