Release of a survey showing a likely £1bn NHS deficit brought the HFMA a sharp rebuke at its annual conference last week, reports Lyn Whitfield

The government is obsessed with news management. The obsession is visible in health policy presentation every week.

Announcements are made to chosen political journalists in time for Sunday newspaper deadlines, with just enough information to ensure the best possible spin. By the time the announcement is actually made it is old news: hardly covered, much less analysed, in the national press.

Some titbits, indeed, turn up as exclusives time and again. And the government does not like bad news.

So with hindsight it was to be expected that the Healthcare Financial Management Association's survey of the financial position of health authorities and trusts would touch a raw nerve.

The survey suggested that the NHS is heading for an income and expenditure deficit of£200m by the end of this financial year - significantly more than the NHS Executive's target.

At a dinner for journalists, senior HFMA members also discussed the problem of historic deficits - identified in an earlier National Audit Office report - which mean that if the NHS had to be 'cashed up tomorrow' it would be£1bn short.

Broadcasters and national newspaper journalists were in a position to cover the story by Thursday 11 November. And as deadlines loomed they were coming under enormous pressure to keep the '£1bn' figure out of the headlines.

The Guardian's health reporter, Sarah Boseley, was reportedly called by Darren Murphy, health secretary Alan Milburn's special adviser, and told the HFMA would be denying its figures.

She was also promised an exclusive chat with Mr Milburn about the next day's 'real story' - the launch of measures to deal with poorly performing doctors - if the HFMA piece was dropped.

When this did not work, Mr Milburn poured scorn on The Guardian's story at the launch press conference the next day.

Ms Boseley told HSJ that she was sure this was to 'deflect other papers' and she felt 'aggrieved' by her treatment - especially as one of the key players later admitted her story was accurate.

Broadcasters came under even greater pressure the previous evening, with one receiving repeated telephone calls from Mr Murphy - Mr Milburn's replacement for the famously foulmouthed Joe McCrea.

Mr Murphy arranged for NHS finance director Colin Reeves to run through the figures for the BBC in midevening, as Mr Milburn paced and fumed in the background.

None of this killed the story. But the repercussions could still be heard at the HFMA's annual conference last week, when NHS chief executive Sir Alan Langlands turned up to deliver the most astonishing rebuke to the professional organisation.

At the event, where Mr Milburn last year went out of his way to praise finance staff for helping to make 'huge inroads' into 'the mess' the government had inherited and beginning to deliver its agenda, Sir Alan acknowledged that the NHS was under unprecedented pressure.

But he added: 'We can do one of two things: get caught in the headlights and panic, or respond strategically and with the day-to-day management of the health service. That is what the public expects of us. That is what we are paid for.

'We are not paid to bleat about resources. We are not paid to undermine the service entrusted to us.'

Incoming HFMA chair Barry Elliott, finance director of Barts and the London trust, still feels that the association needs to provide a voice for reflecting the true financial state of the NHS.

'As a professional association, it is important to make sure these things are properly understood, otherwise managers and finance directors can be blamed for things beyond their control.'

Other HSJ sources have also indicated that some senior NHS Executive officials welcomed the HFMA survey as both accurate and a useful way of pointing up the situation to Mr Milburn.

Sir Alan was having none of it.

'There is a line to be drawn. It is part of your professional responsibility to report these things, but another part is to deal with it .'

Sir Alan did admit, though, that finance directors have a duty to report accurately to their boards. Since boards met in public, he acknowledged that this led to 'occasional bushfires' and would allow journalists prepared to plough through 500 sets of minutes to work out a national picture.

Although Mr Elliott and Mr Morton were - understandably - maintaining a diplomatic silence about the aftermath of the survey, there was a sense of shock among HFMA members attending the conference at the pressure applied to them.

One finance director told HSJ : 'The government keeps talking about openness. We are all having to put in place whistleblowing policies so doctors can speak up. But it seems transparency is not supposed to apply to us.'

And financial constraints are not going to go away.

In his conference speech the previous day, Mr Reeves said 1998-99 had been 'a very successful year', with the combined income and expenditure deficit of HAs and trusts reduced from£120m to£17m, while waiting lists fell from 1.3 million to 1.07 million. The accounts were eventually passed unqualified for an unprecedented fifth year running.

But he added that pressures this year would include the rapid rise in generic drug prices, which have put primary care group budgets under strain, and 'the rate and incidence of clinical negligence, not helped by recent case law', which is pushing up the cost of claims.

He pleaded with finance directors to 'do all you can to ensure the hard-won gains of the past two years are not lost' while delivering on headline government initiatives.

He said the net indebtedness of health bodies has increased from£80m in 1994-95 to 'over£500m'.

Peter Cain, finance director of East Kent HA, asked Sir Alan for assurances that the government recognised the extent of the generic drug problem, which was 'beyond the control' of HAs and PCGs.

Sir Alan responded that 'if it was not this it would be something else', since 'there is something like this every year' and 'it always costs between£100m and£500m' and threatens 'to be the straw that breaks the camel's back'.

But he said negotiations over next year's comprehensive spending review - dubbed SR2000 - would be 'the biggest issue' he had to deal with in the next six to eight months.

In a rare moment of levity, Sir Alan joked that SR2000 sounded 'like a Ford Escort'. But he then returned to his general theme. The NHS needed to highlight its achievements, he said. It needed to 'build government and public confidence' to 'provide a platform for the future'.

'We cannot afford to panic, to get caught in the glare of the headlights, ' he repeated. 'The public expects more from the NHS than ever before. It is our job to deliver it.'