NHS chief executive David Nicholson has rubbished claims that the financial performance of the NHS was a 'tragedy' or a 'farce' as 'factually incorrect'.

Mr Nicholson said negative comments of medical and staff unions are 'damaging to the public confidence and staff morale'.

'Last year for the first time in living memory the NHS delivered in-year financial surplus,' he told the NHS Confederation's annual conference last week.

In a rousing speech to NHS managers, Mr Nicholson thanked them for sticking to their task and delivering financial balance to the NHS.

However, he acknowledged the public perception of the NHS was negative and felt 'uncomfortable'.

'The NHS depends on an alignment between patients, public and staff. And while patients are clearly starting to feel the benefits of reform, this is out of balance with the perception of our public and staff.'

Mr Nicholson said the NHS was in its third phase of growth: adding increased capacity to strategic reforms to make the changes needed to 'transform' the NHS.

He called on NHS leaders to think in terms of 'systems' and look at the 'longer-term horizons' to deliver a fundamental change.

'My message to NHS staff is to look out, not up. The answers lie around you in your communities, not in Whitehall. You don't work for some huge bureaucracy, you work for your patients,' he said.

Shameful behaviour

His attack was echoed by NHS Confederation chief executive Dr Gill Morgan, who said public slanging matches damaged the service. Dr Morgan told delegates the behaviour of some professionals in the past year had left her 'ashamed'.

Unison and the British Medical Association were singled out as she criticised the growing tendency for organisations to launch personal attacks on groups and individuals.

'I was taught that the stages of medical debate were statement, counter-statement followed by personal abuse. We now seem to have a new model that misses out the first two stages,' she said.

Dr Morgan said reconfiguration rows and criticism of targets had undermined the work NHS staff did.

She called for a 'moratorium on hyperbole' to ensure public squabbles did not damage patient care.

Dr Morgan also told delegates that trust boards need to be given more autonomy, with non-executive directors given a greater scrutiny role.

She accepted this would place 'an enormous burden' on strategic health authorities, which must 'manage increasing diversity rather than the linear expectations of the past'.

She added: 'They must judge performance in a much more nuanced way to allow local areas to develop a flavour of their own.'