The NHS is aiming for a surplus of 0.5 per cent by 2008-09, David Nicholson told the Commons public accounts committee on Monday.
The NHS chief executive said that after achieving break-even at the end of this year, the NHS was expected to achieve a surplus of 0.3 per cent in 2007-08, rising to 0.5 per cent by 2008-09.
But Mr Nicholson said he did not expect every primary care trust to achieve balance, as that would reduce dynamism across the service.
Asked why some successful acute trusts which managed their budgets were asked to bail others out, while others kept their surpluses, Mr Nicholson acknowledged that different strategic health authorities had applied the principle differently. He and Department of Health finance director Richard Douglas said they intended to move towards a more uniform approach across different organisations.
Mr Nicholson also said he was satisfied that, despite recent negative publicity, and deficits, vital services would be protected, while some would be developed and expanded.