Charles Walker questions the Health Secretary about measures she has taken to encourage NHS trusts to balance their budgets and what initiatives are in place to reward those NHS trusts that do operate to balanced budgets.

Mr. Walker: To ask the Secretary of State for Health (1) what measures she is taking to encourage NHS trusts to balance their budgets; and if she will make a statement; [70520]

(2) what initiatives are in place to reward those NHS trusts that operate to balanced budgets; and if she will make a statement. [70521]

Andy Burnham: All national health service trusts are expected to achieve financial balance, or better, each and every year. However, we recognise this has been a challenging year for NHS organisations, and the NHS as a whole was forecasting a deficit of around £620 million for 2005-06, at month six.

In 2006-07, the priority will be to restore overall financial balance in the NHS. In order to restore financial balance, the following measures are in place:

Strategic health authority (SHB) reserves-From 2006-07, SHAs have the responsibility to develop and implement a service and financial strategy for managing the financial position within their locality. They will develop this with primary care trusts (PCTs) and NHS trusts in their area. Strategies agreed locally may include the creation of local reserves to deal with local problems. The size of the reserves and any contribution from each PCT will vary according to local circumstances, but the underlying principle will be fairness.

Turnaround teams-In December 2005, the Secretary of State announced the creation of turnaround teams. These teams visited the NHS bodies identified as facing particular financial difficulties. The teams consisted of external consultants, they reviewed the bodies' financial positions and produced preliminary reports on what action could be taken to assist recovery. The bodies deemed to be at particular risk were required to engage appropriate turnaround support on the ground to help improve efficiency and cut costs. All the bodies are expected to produce plans to allow them to return to financial balance.

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