The NHS faces a further round of belt-tightening next year in which more jobs will be lost and servuces cut as the health service prepares for leaner times.

David Nicholson, chief executive of the NHS, will announce today that health authorities and trusts are to be required to achieve a surplus of £250m by March 2008, the date that will mark the end of five years of exceptional growth. Launching the operational plan for the NHS for 2007-08 today, Mr Nicholson will say the surplus is necessary to put the NHS on a "sound financial footing". But it will infuriate unions and medical organisations which are already fighting to retain jobs.

After five years in which spending has grown at an average 7 per cent a year in real terms, last week's pre-Budget statement by the Chancellor Gordon Brown indicated that future spending growth was set to fall by up to half that in 2007-08. It could sink as low as its long-term historic average of 3.1 per cent but experts predict it is more likely to be set at 4 to 5 per cent.

There will be no easing of other NHS targets, including the maximum 18-week waiting time from GP referral to hospital treatment by the end of 2008. Targets will also be set for reducing infections by MRSA and Clostridium difficile.

Patricia Hewitt, Health Secretary, has staked her political future on the NHS eliminating its overall deficit of £512m in 2005-06 by April. The opposition claims at least 20,000 posts have been lost along with ward closures and service cuts.