The Health Secretary announced today that the NHS has ended years of overspending and finished the year with a £510 million surplus, but she admitted that more than one in five trusts were still in deficit.

Patricia Hewitt confirmed that the NHS accounts had been balanced for 2006-7 after drastic cuts were ordered by the Government in the last year after redundancies, a reduction in training and even an increase in parking charges helping trusts to reduce their spending.

Last year’s figures showed a £547 million NHS budget deficit and Ms Hewitt promised to resign this year if the NHS went into the red again. She said the surplus was good news but amounted to less than 0.5 per cent of the total budget.

“If we hadn’t taken decisive action to deal with the overspending, the NHS deficit would have doubled again this year. The minority of over-spenders know they have to put their own house in order instead of expecting strategic health authority trusts to bail them out,” she said.

“I want to thank NHS staff, who have worked incredibly hard to turn the NHS around while minimising the impact on patients and cutting waiting lists to their lowest level ever.”

While many trusts have turned a surplus, 17 trusts are still categorised as “financially challenged”, 22 per cent of NHS organisations ended the year with gross deficits.

North Tees and Hartlepool NHS Trust was one of the organisations to turn around a deficit of almost £20 million 18 months ago. This year’s figures show a £3 million surplus after training cuts and the 4,500 strong workforce reduced by 300.

Andrew Lansley, the Shadow Health Secretary, said: "Cutting education and training and plundering public health budgets is not the way to manage the future of our NHS.

"No other business would be run on boom and bust and neither should the health service."

A leaked e-mail seen by The Times reveals that the Government is worried that expenditure cuts have dented the flagship waiting list policy. The e-mail said more than half of patients were still waiting longer than 18 weeks for treatment and that some still faced waits “in excess of one year”.

However, Ms Hewitt denied there was a waiting list crisis this morning. “There is some leaked email about the figures for one part of the country. The fact is, that last December when we first saw baseline data, only about one third of patients were going from GP referral right through to the operating table in less than 18 weeks,” she told BBC Radio 4.

“What we now have is nearly half of patients getting from the GP to the operating table within 18 weeks, and by the end of next year it will be true across the NHS. The media should be congratulating the NHS on this achievement, not trying to belittle it.”

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