Creating 'financial headroom' this fiscal year is essential in coping with the risk of increased costs as healthcare shifts from hospitals to primary care, NHS chief executive David Nicholson told a Downing Street press conference on Tuesday.

Creating 'financial headroom' this fiscal year is essential in coping with the risk of increased costs as healthcare shifts from hospitals to primary care, NHS chief executive David Nicholson told a Downing Street press conference on Tuesday.

At his first prime ministerial press conference, he said: 'There is always a danger when you're shifting from one system to another that you will not have the financial flexibility to manage that. That's why it's so important that we get ourselves into financial balance to create the headroom to manage that.'

He appealed for 'consistency of purpose' to drive forward reform. 'It will take imagination and courage and leadership of management and clinicians.

'We need to move the debate away from how many beds there are, how many hospital closures, how many hospitals saved, and move to one on how we can improve patient safety and services.'

Mr Nicholson was closely questioned about the likely number of job losses by the end of the year. He said genuine job losses would be 'significantly less' than estimates of 20,000, although he did not quote the figure of just under 800 compulsory redundancies so far that is claimed by NHS Employers.

In a hostile press conference, Mr Nicholson defended himself against accusations that he was only in the job because of the 'financial mismanagement' of his predecessor, Sir Nigel Crisp. 'I am not being complacent about the financial position of the NHS, which is significant and we have to deal with it.'

In further questions, the prime minister denied that decentralised decision making and diversity would necessarily lead to a postcode lottery, but said 'a line needed to be drawn' between treatments which would be subject to national standards and those which would not.