---

Department of Health

Yes, but I do not think that it is a structural issue. The cost charged to the PCT may not be the cost of the activity itself. That is a crucial issue for the NHS. Monitor—the independent regulator of NHS foundation trusts—identified the fact that NHS foundation trusts incurred an aggregate deficit of £36.9 million in 2004–05, which represented 0.9 per cent. of their income. This year, one in every 32 trusts is forecast to incur a substantial deficit for the first six months of 2005–06, although in aggregate trusts forecast a surplus for 2005–06. However, that forecast carried heavy caveats in Monitor’s report, a copy of which has been placed in the Library. No doubt hon. Members will wish to look at it, as it deals with the issues raised by the right hon. Gentleman. We need to know how foundation trusts with a large increase in income have achieved that balance.