FINANCES at York Health Services NHS Trust are looking healthier thanks to a £1 million loan by the Strategic Health Authority.

The trust, which runs York Hospital, began cost-cutting measures at the end of last year in an effort to balance its books.

It was facing a £3.5 million budget shortfall, but a balanced income and expenditure position is now being forecast for the end of the financial year.

However, there is still a £1.9 million overspend on directorate budgets, a position which worsened by £200,000 during January, mainly due to medical and surgical supplies.

George Wood, deputy chief executive of the trust, said in a report to board members: "It is essential that directorates' revised forecast positions are maintained and do not worsen during February and March.

"There continues to be concerns about the continued high level of expenditure associated with increased demand on non-elective services, and the continued pressure to guarantee the waiting list targets despite the disruption caused to hospital services by the Norwalk virus and increasing levels of emergency admissions."

Mr Wood said the trust was continuing to work with the Selby and York Primary Care Trust and the Strategic Health Authority to ensure financial balance.

Last year strict controls were introduced on non-essential staff recruitment, advertising was limited and the purchase of office equipment, furniture and computer software was also halted.

The agreed £1 million funding from the Strategic Health Authority will have to be paid back next year.

Updated: 09:21 Thursday, February 27, 2003