Enlarge imageBy Kate Holton
LONDON (Reuters) - The NHS, in deficit despite record investment, faces a difficult and challenging year, Prime Minister Tony Blair said on Wednesday as he met health bosses to discuss the financial crisis.
The government is trying to reform the National Health Service to make it more efficient but despite record investment, it is expected to report a 623 million pounds overspend.
Media reports have said some 7,000 job cuts have been announced across the service in recent weeks but a spokesman for the Department of Health said many of the job losses affected temporary or agency staff and reflected "natural wastage".
Blair and Secretary of Health Patricia Hewitt met the chief executives of several Primary Care Trusts at Downing Street to discuss the system.
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"There is a year of challenge which is going to be very difficult but, on the other hand, there (are) still massive improvements happening," Blair said after the meeting.
"Waiting lists are falling, cancer and cardiac care are improving, admissions are improving the whole time (and) you’ve got a huge hospital building programme going on.
"However, it is our job to make sure that all this extra investment is used properly to get the best benefit for the patient and that’s really what today was about."
Many observers are puzzled as to why so many hospitals are cutting jobs and delaying non-emergency treatment because of cash shortages given that the government has been pumping record sums into the service.
Critics say the money has been poorly spent on middle managers rather than frontline medical staff.
In January, Hewitt said she was sending in "turnaround teams" of financial specialists to the health trusts facing the greatest financial risks.
On Wednesday she said she was confident the financial problems could be solved.
"There will be a deficit in the NHS in the financial year that’s just ended," she told Sky news. "It’ll be about one percent of the total budget. It’s a problem but it’s a manageable problem."
The meeting came as a report by the Reform think tank said government changes to the NHS could lead to a 10 percent cut in staff -- or 100,000 job losses -- but would also result in a more efficient system.
"We are not talking about redundancies, we’re talking about a gradual process of change," report author Nick Bosanquet told BBC radio.
"We’re going to have a somewhat smaller NHS directly-employed workforce and that gives us the chance to improve their conditions of work, to give them more support and to get more patient care."
While Hewitt said she recognised the numbers cited by the Reform group, she also said she accepted that a reduced service could be more productive.
