The NHS finished last financial year with a surplus equivalent to £2.2bn, spending watchdogs have said.

By mid year, its direct surplus had grown by more than 80 per cent from a planned surplus of£916m.

NHS organisations underspent by£1.67bn and foundation trusts by a further£395m, the Audit Commission and National Audit Office said this week in their annual report on NHS financial management.

If foundation trust finances were reported in the same way as NHS trusts their surplus for 2007-08 would have been£528m.

Audit Commission head of health Andy McKeon said the size of the surpluses gave the service a better basis for facing up to the coming restrictions on public spending. The watchdogs found no evidence the surplus had been generated by restricting services or quality.


Some NHS organisations used unusual accountancy techniques to minimise their underspends. Irregularities in the accounts of two primary care trusts - Norfolk PCT and Great Yarmouth and Waveney PCT - were so severe that they were qualified by the auditors.

Auditors made minor adjustments to other organisations' accounts, but these increased the surplus by just£12m. They identified£45m of other issues that they said did not warrant amending the accounts.

The Audit Commission will publish details on the common errors shortly. Chief executive Steve Bundred said there were significant challenges next year, "but it looks as though most NHS bodies are well placed to cope".