Prime Minister, Tony Blair, says the NHS (National Health Service) faces hard times ahead. Despite record investment, the NHS still cannot balance its books. A £623 million ($1.1 billion) deficit is predicted.

Rumours are rife that about seven thousand jobs will have to be cut. However, according to the Department of Health, efficiency will be achieved through 'natural wastage' and a revision of temporary and agency staff.

(Natural Wastage = People retire, leave of their own accord, and you do not replace them).

Tony Blair, Patricia Hewitt (Health Secretary) and CEOs of many major Primary Care Trusts (PCTs) have had a meeting at the Prime Minister's residence (10 Downing Street). Commenting on the meeting, Tony Blair said that the year ahead will have challenges and difficulties. He added that massive improvements are underway, such as falling waiting lists, better cancer and cardiac care, better admissions, plus a huge hospital building programme.

"It is our job to make sure that all this extra investment is used properly to get the best benefit for the patient and that's really what today (the meeting) was about," said Tony Blair.

The media and several health care professionals want to know why so many hospitals are cutting back on staff while more and more money has been pumped into the NHS. Some say most of the extra money has gone into recruiting middle managers, when it should have been spent on doctors and nurses.

Patricia Hewitt said the deficit must be looked at in perspective. Although, on its own, the sum is huge - it represents one per cent of the NHS budget. She described the deficit as a "manageable problem".

The question everyone is asking is "Why on earth is there a deficit if so much money has been pouring in?"