It's crunch time for the NHS: despite record investment in recent years, debts of between £600m and 700m are predicted for the past financial year, and there is little sign of the financial crisis abating. Some 7,000 jobs have been lost in the past two months, and the Royal College of Nursing predicts up to 13,000 more will go.
Despite mounting concern among patients and healthcare staff, the health secretary, Patricia Hewitt, yesterday claimed the NHS had just had "its best year ever". She pointed to waiting times for hospital treatment having fallen to an all-time low as proof of the success of New Labour's reforms.
There is much to praise in the government's record on the NHS. It reversed years of underinvestment, and spending on health this year will be almost triple the NHS budget when Labour came to power, having risen from £34bn in 1997 to £90.5bn in 2005-06. Waiting lists have been cut by almost 200,000 since 1997. On December 31 there were only 12 people who had waited longer than six months for inpatient treatment, compared with 66,000 in December 2004. And the number of doctors has risen by a quarter since 1999, to around 117,000, while the number of nurses has risen by a fifth, to around 397,500.
The health secretary has blamed poor financial management by a small proportion of health trusts for the current debts, and has pointed out that the deficit is only 1% of the total NHS budget. Her critics, however, lay much of the blame at the door of government reforms - not least for its miscalculation of the salary packages for NHS staff.
The Department of Health recently revealed that new contracts for doctors and nurses had cost £610m more than expected. According to the thinktank the King's Fund, almost 40% of the extra cash available this year will go on pay rises.
Both GPs and hospital consultants have secured lucrative new contracts. Average pay for newly qualified consultants has risen to £70,823 - 68% more than in 1997 - with average pay for the profession as a whole approaching £100,000. The average pay of GPs is around £100,000 - double what they got in 2000. And some GPs are earning up to £300,000.
The financial crisis has already claimed the scalp of one senior health official at the Department of Health. Sir Nigel Crisp resigned as NHS chief executive amid rumours he had lost the confidence of Ms Hewitt. And parliament's health select committee recently announced an inquiry to find out why some trusts had overspent to such a degree.
This week, Guardian Unlimited is running a series of five analysis pieces on the NHS's troubles by some of the UK's top healthcare experts. Each commentator is looking at a particular aspect of the government's reforms to see why they have cost so much to implement - sometimes far more than ministers and their officials anticipated. A series of complementary podcast interviews with some of our expert panel can be downloaded from the site.
The first piece looks at how the government's political targets to cut waiting times for NHS treatment have squeezed trusts' ability to balance their budgets.
Later in the week, the head of the British Medical Association looks at the costs of structural reform of the NHS, much of which looks unnecessary, with organisations being scrapped and merged only to end up in a similar state to their original form.
The Institute for Public Policy Research examines the impact of rising patient expectation and demand for new types of treatment, such as the breast cancer drug Herceptin; and the King's Fund examines staff pay.
There will be a podcast at the end of the week summing up their findings and where the NHS goes from here.
