The Royal Free in north London and the Princess Alexandra in Harlow, a few miles away from Stansted airport in Essex, are two very different hospitals. One is a teaching hospital with a turnover of £350m ($615m) a year. The other is a much smaller district hospital with an annual turnover of £120m. But they have a common problem. Each will be in the red in the financial year ending this March. Across the National Health Service, a deficit of around £800m is now expected for 2005-06. This is far worse than the £250m shortfall in 2004-05, which followed a period of small surpluses (see chart). And it also marks a deterioration from the position in December, when a deficit of £620m was forecast for this year.
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