GOVERNMENT cash which was expected to go into the NHS was used to bail out the war on terrorism and the foot and mouth crisis.

That was the revelation made by Burnley Health Care Trust finance director David Meakin at the board meeting at Rossendale Hospital.

He was asked by health watchdog chairman Coun Frank Clifford if the trust had expected to get money when it sought to employ nurses from the Philippines.

Mr Meakin said: "We were told there was money left for the NHS but we have now been told that it has gone to fund the war and the foot and mouth crisis."

The trust has overspent by more than £1.3million in the first six months of this financial year and is now planning to scrap half a million pounds worth of capital plans for next year and transfer the money to offset the losses.

Chairman Brian Foster said: "We have sent a letter to region to say that we can't reach the targets set for us because there is not enough money but we have had no directions as to which targets we don't have to meet. I am concerned to make it clear the overspending is not as a result of inefficient management."

The board was told the East Lancashire community as a whole, including all health trusts and the authority, had overspent by £5,250,000 so far this year.

Mr Meakin said: "Other trusts are having similar financial problems and some are also in a worse situation of overspending and have not had the same patient care.

"It is putting an incredible strain on resources."

He said board members were meeting today with local health economy partners to see if more funding can be found and there will also be meetings with hospital directorates to see if savings of between one and two per cent can be found.

Mr Meakin said: "The dilemma is we cannot continue to hit patient targets with the resources we have available. Waiting list money runs out on January 31 -- so do we work with waiting lists in February and March or do we try to get a financial balance?"