The Health Secretary today announced that the NHS has balanced its books - despite the fact that many hospitals are still in debt.
Following the publication of end of year figures for 2006-2007, Patricia Hewitt said the NHS was in its 'strongest financial position for many years'.
Last year the NHS reported a deficit in the annual accounts of £547 million with 33% of organisations in deficit and a gross deficit of £1,312 million. This year unaudited results for 2006-07 suggested a net surplus of over £500 million with the proportion of all NHS organisations in deficit reduced to 22%.
Ms Hewitt praised NHS staff for 'turning' the NHS around.
"I want to thank NHS staff who have worked incredibly hard to turn the NHS around while minimising the impact on patients and cutting waiting lists to their lowest level ever. It is a real tribute to staff that despite these very difficult decisions, over nine out of ten hospital patients - even more than last year - rated their care as good, very good or excellent.
"If we hadn't taken decisive action to deal with the overspending, the NHS deficit would have doubled again this year. Instead, the NHS has a fairer and more transparent financial system than ever before. The minority of over-spenders know they have to put their own house in order instead of expecting SHA trusts to bail them out.
"The NHS is now in a strong position to make best use of the extra £8 billion it is getting this year. This will help pay for new drugs, make waits even shorter, treat an extra 800,000 patients, perform an extra 300,000 operations, tackle hospital infections and deliver more personalised care to patients."
But, speaking at the consultants' annual conference, Dr Jonathan Fielden, chairman of the British Medical Association's consultants' committee, claimed cuts had been "excessive".
"While the NHS may be in credit today, the journey to balance the books has wreaked havoc on the NHS and is a return to boom and bust health economics. There have been excessive cuts in service and it will take years to rebuild the trust and collaboration that has been destroyed in the past year," he added.
And the NHS Information Centre claimed that 17,000 job loses had been forced on NHS trusts in the past 12 months.