Published: 05/02/2004, Volume II4, No. 5891 Page 26 27

HSJ's news story ''Bail-out' billions have 'disappeared'' (news, page 5, 22 January) is misleading on two counts.

First, we have never had any plans to inject cash in-year into the NHS to bail anyone out. In both 2002-03 and 2003-04, we were quite clear at the point of allocations that there would be no top-ups during the year.We have been clear and consistent about this from the outset.

Second, the news story implies we have a secret pot of money that nobody knows about or how it might be used. This is simply not the case. Details of the central budgets appear on our website.

We update strategic health authority chief executives and finance directors on central budget spending during the year.

I am looking at how we might improve transparency even further, but if there were extra funds available we would have been open about it.

Against a background of planned growth in 2002-03 (revenue expenditure of 9.2 per cent and capital expenditure of more than 20 per cent), the news story paints a picture of an NHS in financial meltdown.We recognise that at this time of year there are growing financial pressures. But experience shows that early estimates can be misleading and by the end of the year the NHS hits financial balance. I am confident this year will be no different.

Richard Douglas Director of finance Department of Health