CASH-STRAPPED health bosses may not be forced to pay back their multi-million pound debt during the coming year, a top level meeting heard.

Members of Selby and York Primary Care Trust's (PCT) board met yesterday to discuss a plan to save £22.8million over the next financial year.

But the financial recovery plan for the next 12 months does not include repaying the trust's separate £23.7million debt, left at the end of 2005/6. There had been fears that the PCT could be faced with paying back the debt and making the savings in 2006/07.

But its acting director of finance, Sheenagh Powell, said in a report to the board: "The Department of Health planning assumption is that in 2006/7, organisations should both achieve in-year recurrent balance and recover 2005/6 deficits.

"There are, however, exceptional circumstances when organisations may be allowed more time to recover the 2005/6 deficit.

"These exceptional circumstances include those organisations formally included within the 'Department of Health Turnaround Programme', as in the case of Selby and York PCT.

"The PCT's resource assumptions have therefore been revised to incorporate this planning guidance."

Acting PCT chief executive Penny Jones told the meeting: "It's very hard to feel proud of containing a £23.7million deficit, but what we do know is that it had the potential to be a lot worse.

"(Finance advisers) KPMG said in December that the very best would be £28 million - it could have been £32 million. It least it's shown that we have halted that overspend - people are now working in the right direction to get back into balance."

Board members thanked frontline health staff for their help in stopping the debt in its tracks.

Yesterday we reported how the PCT was planning to spend £14 million less at York Hospital next year - but its chief executive, Jim Easton, said the hospital's own estimates were that its drop in earnings would be far less.

Earlier this year, the hospital announced it would shed 200 jobs this year as part of a cost-cutting vacancy freeze - but director of nursing Mike Proctor said yesterday it was possible a fall in income from the PCT could now mean a bigger impact on jobs.

"The extent to which their diversionary schemes (treating people outside hospital) come into place will mean that we will have to reduce the size of what we do in hospital - which could have an impact on jobs in the longer term," he said. "We still don't know to what extent. The 200 (jobs) vacancy freeze still stands."

Updated: 09:24 Wednesday, May 24, 2006