Hospitals will face renewed pressure to save money, cut waiting times and tackle superbugs under new performance targets to be set today by the Government.

In his first report as chief exective of the NHS, David Nicholson has compiled a list of priorities for the next financial year, including a target for a £250 million budget surplus by March 2008. He will also demand faster access to treatment and less of a “postcode lottery” of health inequalities.

A new benchmark is to be set for the 18-week waiting times target — widely regarded as the most ambitious of all NHS targets — that almost all hospitals will treat patients within that time by March 2008. The Government has pledged to have all patients treated within 18 weeks of a doctor’s referral by the end of that year.

Mr Nicholson’s target for a £250 million surplus comes amid rising levels of debt in the NHS. Funding has more than doubled in ten years, but the total NHS deficit has also risen.

Thousands of job losses and other cost-cutting measures have already been announced to make savings, but Patricia Hewitt, the Health Secretary, said yesterday that hospitals that did not meet the 18-week target could be penalised with further financial sanctions.

About half of all hospital patients are currently treated within 18 weeks, but further progress has been limited by bottlenecks of patients waiting weeks for scans or test results.

Meanwhile, nearly a third of hospitals and a quarter of all 570 NHS organisations failed to balance their books in 2005-06, leaving the NHS with a net deficit of £547 million.

The latest figures show that 120 of 548 NHS organisations are now predicting deficits for the current financial year, with 90 per cent of the estimated gross deficit originating from 71 trusts. Despite this, ministers are confident that the NHS will generate a profit by next year, but that will become even more difficult to achieve after 2008 when extra funding supplied by the Treasury is due to dry up.

John Appleby, chief economist at the King’s Fund, the health think-tank, said that the new surplus target was intended to provide a “buffer” to the anticipated drop in the rate of growth, from a 10 per cent year-on-year cash increase to between 2.5 to 3.5 per cent by 2008-09, he said.

“There’s a paradox of lots of money going into the NHS but trusts still overspending and going into debt. It is possible that across the NHS the system can generate a surplus by 2008, but whether the system can meet that at the same time as meeting other performance targets is open to question.”

A Department of Health spokesman said: “Only by managing finances efficiently can NHS organisations develop and improve services. The majority of organisations are delivering on finance and patient care, but more need to generate surpluses to recover historic overspending.”

Hospitals affected by the latest superbug, Clostridium difficile, will be able to bid for grants of up to £350,000 each from a £50 million fund to combat infection rates. The grants could pay for measures such as extra basins for hand-washing in an attempt to stop the spread of C. difficile — which kills three times as many patients as the better-known MRSA, Ms Hewitt said.

“MRSA has been coming down, thanks in part to the target we set some years ago,” she told The Sunday Edition on ITV. “C. difficile, this new and very nasty bug, is bad in some hospitals but not in others.

“So we want local hospitals to look at their own performance and, where they are not doing well enough, to set a local target agreed publicly with their local NHS. We are backing them up with more money — up to £350,000 for each hospital organisation.”

Getting back into the black

£7bn Amount that spending has increased this year, from £69.7 billion to £76.4 billion

£92bn Estimated NHS budget for 2007-08

£547m Net deficit of the NHS for 2005-06

Source: Department of Heath, Times database

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