London health authorities have resigned themselves to a new round of cuts in a last-ditch attempt to balance the books by April. A snapshot survey by HSJ revealed that cost-cutting would exacerbate the capital's bed shortage. One manager commented: 'The basic problem is there is not enough money to meet the current level of demand. 'The Department of Health said it would not allow HAs to carry over deficits as this would put the new purchasing authorities at a disadvantage.

Large sums of money are likely to be tied up in reserve funds at unit, district and regional levels in the next financial year, leading to potential problems cutting waiting lists. The reserves are needed to meet a range of uncertainties caused by the internal market reforms. NHS finance director Sheila Masters has warned that reserve funds ought to be kept to a minimum so that service provision is not curtailed.

A voluntary code of practice to ensure hospitals do not sacrifice quality under financial pressure on the internal market is to be agreed in East Anglian region. It has been prompted by concerns that purchasers may press hospitals to cut quality to stay within budget.

A British Medical Association survey has revealed that fears of doctors leaving the NHS in droves are unfounded. Although many are unhappy, their dissatisfaction is generally not enough to make them pack their bags. Anecdotal evidence has suggested doctors are looking for careers in other fields such as banking, communications and computing.

Hastings HA has turned down an offer from former Beatle Paul McCartney to keep open casualty services at his local Rye Memorial Hospital by paying the wages of agency staff. The HA says staff shortages rather than money are the problem.