But the £512 million figure tells only part of the story. It would have been twice as high if strategic health authorities had not generated a surplus of £524 million from the £3.9 billion provided to them for education and training.

That surplus offset the deficits run up by the rest of the NHS, and raises questions about what has been sacrificed. Either education and training have suffered, or the SHAs were given far more money than they needed.

The accounts also show a huge and puzzling underspend on capital projects, such as new buildings. SHAs generated a surplus of £1.162 billion on capital account, partly by delaying projects and partly by accelerating the sale of assets.

Some cash intended for buildings and maintenance actually went on paying salaries and suppliers. How much is not clear, and in principle it should not make any difference to the bottom line, as such transfers have to be included as outstanding debts on the revenue account. But there will be especially close attention paid to the auditing of the accounts, which should show up the extent of any such transfers.

Last year, the deficit rose by 80 per cent when the unaudited figures were closely examined. There are always errors, but in previous years they had tended to balance out. The fact that last year they didn’t rang alarm bells with the National Audit Office and the Audit Commission.

Andy McKeon, of the commission, said yesterday that he was concerned about the declining quality of NHS accounts. “Big efforts have been made to improve this, but the proof will come from the audit of the 2005-06 accounts.”

Patricia Hewitt and the NHS acting chief executive, Sir Ian Carruthers, make much of the fact that the deficit represents less than 1 per cent of turnover — equivalent to someone earning £20,000 finishing the year £160 in debt.

But there are a number of individual trusts whose deficits represent 10 per cent or more of their annual income. They face very serious difficulties in recovering these deficits. In addition, at the start of the year, the NHS was already carrying an accumulated deficit of £598 million from previous years. That means the total deficit amounts to more than £1 billion.

Trusts that overspend have the amount of overspending deducted from their next year’s allocation — or at least are supposed to. Having made a loss in Year 1, they have that much less money in year two, and are still expected to balance the books.

It is questionable whether some of the more indebted trusts have any hope of rescuing themselves, without a further input of funds. The effect of the system is to multiply deficits year on year.

Cash has taken over from waiting-time targets as the No 1 NHS priority.

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