A West Midlands nurses' leader yesterday dismissed as "nonsense" a Government pledge the NHS will break even in four months and generate a surplus in 2008.
The NHS Operating Framework plan outlined by NHS chief executive David Nicholson yesterday said the service needed to balance books this financial year and go on to create #250 million in 2007/08.
He outlined targets including creating a firmer financial footing, tackling health inequalities and introducing penalties for trusts failing to meet targets on waiting times.
Health Secretary Patricia Hewitt said she was "absolutely confident" the health service would balance books by the end of March 2007.
She said: "We will have the NHS back into financial balance by the end of March. I am absolutely confident. Of course it's a pledge."
But the British Medical Association and the Royal College of Nursing criticised the absence of proposals to scrap the controversial Resource Accounting and Budgeting (RAB) financial regime, although the plan acknowledged the system does cause problems.
According to the RAB principle, if a trust reports a deficit in one year, its income is reduced by that amount the following year and it has to carry forward the original deficit.
This year, the Audit Commission recommended NHS trusts be freed from RAB.
Ann Leedham-Smith, regional director of the RCN's West Midlands branch, said: "This is all nonsense. You cannot bankrupt hospitals because they are needed.
"The Government keep happily telling us the overspend is 1.6 per cent of the budget, so why not simply write it off?
"How are hospitals going to pay this money because they have job freezes and budget cuts already? Where is this money going to come from that needs to be saved?
"All the PFI schemes are out of control across the Midlands. Walsall have financial problems, City Hospital, and University Hospital Birmingham will have a large building but a massive deficit."
Dr Jonathan Fielden, chairman of the BMA’s consultants’ committee said: "Whilst it may be good business practice to have a financial surplus, the NHS will struggle to meet the challenge at a time when hospitals are already cutting back on services.
"Operations are being delayed, jobs are being frozen, and trained doctors and other healthcare staff are struggling to find jobs, while the NHS attempts to get its finances sorted.
"It is extremely disappointing to see that the NHS accounting rules, known as Resource Accounting and Budgeting, remain intact. This artificial accounting measure has imperilled many NHS trusts unnecessarily and forces short term cuts directly impacting on patient care."
However, Mr Nicholson said: "RAB does not cause deficits, spending more than you’ve got causes deficits."
He added there was "no free lunch" and that in order to reverse RAB, financial resources needed to be generated first.