NHS close to financial meltdown

The NHS is facing a winter of discontent as the latest figures signal another round of cuts.

More than 200 trusts, 40 per cent of the total, have overspent six months into the financial year, with a gross forecast deficit of £1.18bn, almost £300m more than three months ago. More than 20,000 nursing posts have been frozen or cut, wards have been closed and services have been withdrawn, but it has not been enough to curb overspending.

Draconian new rules which require trusts in surplus to hand over their cash to "contingency" funds, to bail out those that have spent too much, are all that stand between the NHS and financial meltdown. Taking account of the surpluses and contingency funds, the forecast net deficit for the end of the year next April has risen to £94m, up from £18m three months ago, the Department of Health said yesterday.

The NHS's chief executive, David Nicholson, said the NHS would still break even but, he added: "I do not underestimate how difficult this will be."