Only one in nine NHS redundancies so far this year has come as a result of Commissioning a Patient-led NHS, health secretary Patricia Hewitt has told MPs.

Only one in nine NHS redundancies so far this year has come as a result of Commissioning a Patient-led NHS, health secretary Patricia Hewitt has told MPs.

Out of a total 903 NHS job losses in the first half of the current financial year, just 100 posts have been cut due to reconfiguration of strategic health authorities and primary care trusts, the Commons health select committee heard. But 'there will be much larger numbers' to come, Ms Hewitt warned.

A reduction in the number of PCTs from 303 to 152 meant 'there were always going to be a substantial number of redundancies', she said. 'We are trying to keep compulsory redundancies to a minimum but we are taking out a lot of management jobs.'

The health secretary denied claims by Conservative MP David Amess that there were too many managers compared to frontline clinicians. 'There are five beds for every manager and 10 nurses for every manager,' she said. The NHS had a lower percentage of managers than private healthcare or the average across the public sector. 'In the past people have rightly criticised the NHS for being under-managed', particularly in terms of financial control,' she added.

Labour MP Dr Howard Stoate, a GP, warned that financial deficits could be partly due to fiddling the system of paying hospitals per patient treated. 'Payment by results might be driving hospitals to re-code admissions as it is in their interests to do so.' Hospitals would also gain financially from admitting more people rather than following government policy of reducing emergency admissions, he added.

But NHS chief executive David Nicholson, also giving evidence to the committee, denied the charge. 'I don't accept that medical staff are changing diagnoses so that there is benefit from PbR.' Short admissions were due to changes in medical practice, he insisted.

Ms Hewitt said hospitals were paid less for patients who were admitted for less than 24 hours so they had no incentive to cheat. She also denied MPs' claims that private finance initiative schemes had contributed to NHS debts. Only 19 out of 174 PCTs and acute trusts with deficits had such projects, she said.

Labour MP Charlotte Atkins said hospital trusts might face difficulties in funding PFI repayments in future when the rate of increase in the NHS budget is set to tail off, from 2008. Ms Hewitt said local NHS trusts had to ensure every PFI project was carefully costed.

Proposals 'won't be finally signed off until we know the trust is able to afford it', she added. Plans for two new PFI hospitals, one in Hertfordshire and one in Essex, had been cancelled after reviews cast doubt on affordability, she added.