The potentially lost ground has been made up by a combination of productivity improvements and re-negotiating a contract with NHS Cambridgeshire, the primary care trust, for non-core activities, according to the hospitals finance director Dean Westcott. Back in the autumn, we were forecasting a deficit, but we put in extra measures that we think have recovered that position though we shall not know for sure until all the bills are in for March, he told The Hunts Post. We have been having discussions with commissioners [the PCT and consortia of GPs] about the block price of non-tariff services, and we have managed to secure some more income. There was a recognition that the cost of [providing] some services was more than we were receiving. Most hospital activities are covered by tariffs set by the Department of Health, so every hospital gets the same reward for, say, a hip replacement, an x-ray, a blood test or an ingrowing toenail. But Hinchingbrooke also hosts other services that could be provided elsewhere in the medical community. It is payment for those that has been re-negotiated. Hinchingbrooke has also found some additional procurement efficiencies, particularly in the area of telephony, that helped to reduce costs in the second half of the financial year that ended on March 31. Cutting the length of patients hospital stays was also a key factor in the year-end result. That brings all sorts of benefits, Mr Westcott said. Not only does it save on staffing needs, particularly on bank and agency staff but the patients obviously benefit too, which is the main thing. They dont want to be here any longer than they need to. The prospect of breaking even on the £100million annual budget has meant the board has approved a balanced budget for 2011/12 (not that it would have been allowed to set a deficit budget under NHS rules, anyway) for the new regime that starts in the summer. The final business case for franchising the hospitals management to John Lewis-style partnership Circle Health is sitting on the desk of beleaguered Health Secretary Andrew Lansley, who is also MP for South Cambridgeshire. Assuming he signs it off before Easter, Circle will probably take over on or about July 1. One of the first tasks facing the new managers will be to oversee the four per cent efficiency savings required by the Department of Health on tariff-based activity at Hinchingbrooke on 2011/12, as the hospitals contribution to the £15-20bn savings required from the NHS as a whole..