Ministers failed to take a grip on the NHS's net £570m deficit in England last year because the Department of Health did not collect enough information to realise the extent of the problem, a cross-party committee of MPs will say today.

The Commons public accounts committee found that errors in the costing of national pay awards for doctors, nurses and other NHS staff increased spending by £560m, without extra government funding. Some trusts were able to absorb the higher costs, but others did not have the financial expertise to take a grip. Ministers could not intervene to stop the deficit growing because the department's management information systems left officials unaware of what was happening.

The committee said: "The in-year financial information produced by some NHS bodies ... does not allow the department to manage the national finances of the NHS in an effective manner."

Officials giving evidence to the committee were unable to estimate how many staff were made redundant by trusts trying to eliminate deficits. After the MPs insisted on finding out, the department found there had been 903 compulsory redundancies in the six months.

Edward Leigh, the committee's chairman, said the NHS must face up to "uncomfortable truths". In spite of a big increase in the budget, the number of overspending trusts steadily increased and their combined deficits by the end of the last financial year topped £1bn.

Andy Burnham, the health minister, said the government had already introduced "new rigour and discipline to NHS finances, as well as unprecedented transparency". The service was back on track to deliver net financial balance by the end of the year.

Dame Gill Morgan, chief executive of the NHS Confederation, which represents the trusts, appealed to ministers to accept the MPs' call for a change in accounting rules which impose a double penalty on trusts falling into deficit.