HOSPITALS and doctors surgeries in the north west made a healthy surplus of £190m last year.

While one in five NHS organisations made losses of millions of pounds, health chiefs here ended the year with a `very commendable' surplus, according to the Commons public accounts committee.

The committee chairman, Tory MP Edward Leigh, said: "Following two years of rising deficits the Department of Health, working with the NHS, has done well in restoring overall financial balance."

But Mr Leigh warned that there were dramatic variations in financial performance - 82 NHS trusts chalked up losses of over £900m and the north west's £190m surplus is in contrast to a £153m deficit in hospitals in the east of the country.

He said: "The headline figures of an overall surplus last year of over half a billion pounds mask some unwelcome evidence that the NHS is not yet travelling along the road to long-term financial health."

He said overall quality of healthcare appears to have improved but admitted some trusts had limited the amount of healthcare they delivered either to make savings or because their budgets were cut.

In the north west primary care trusts ended up with a deficit of £2.4m and NHS trusts were nearly £15m in the red. But, after taking account of the strategic health authority's massive surplus the region was left with a £190m profit.

Health unions have previously criticised the strategic health authority for holding on to cash while hospitals struggle to pay bills.

But regional health managers have argued it is good financial planning to hold on to a surplus.

Mr Leigh said: "Bad financial management at local level can have significant consequences for patients: there is a clear link between the financial performance of a body and the quality of its clinical services.

"This is a lesson which must be driven home across the NHS to financial and clinical staff."

And while he welcomed the north west's surplus he said that health chiefs had to be able to demonstrate they had provided a level of healthcare that meets local needs.

Mr Leigh stressed that financial management was important, but added: "Large surpluses will prompt the question why this money could not have been used to deliver a higher level of healthcare."

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