TENS of millions of pounds that could be spent on health care will be taken out of the North-East Health Service as a safeguard against future debts.

Government concerns about over-spending in the NHS means that primary care trusts in the North-East and North Yorkshire have been ordered to set aside a proportion of this year's budget.

Worst affected in the region are primary care trusts in North Yorkshire where regional health bosses have asked trust managers to keep back 2.5 per cent of its budget to provide a buffer against possible overspends this year.

This has led to Harrogate Hospital admitting that it will have to make cuts, after it confirmed that its trust was cutting spending on hospital services by £7m.

Penny Jones, chief executive of Craven, Harrogate and Rural District Primary Care Trust (PCT), said: "This requirement to set aside a reserve... is a significant additional factor affecting our planning for the current year. This means we have £5.9m less to commit to other services."

The tough line taken by regional health bosses in North Yorkshire reflects the fact that PCTs and hospital trusts in that area finished the financial year approximately £47m in the red.

But, because health organisations in the North-East finished the year underspent, by approximately £6m, regional bosses have taken a more relaxed view.

This means that most trusts in County Durham, Teesside, Tyneside, Wearside and Northumberland will be asked to pay one per cent of their budgets into a holding fund.

David Stout, financial director of Northumberland, Tyne and Wear Strategic Health Authority (SHA) and acting financial director of County Durham and Tees Valley SHA, said: "We have done very well in the North-East compared to the rest of the country in terms of financial stability. Last year, we underspent by a fraction of one per cent on an overal budget of about £3.5bn."

But Mr Stout warned that overspending PCTs and hospital trusts in the region needed to balance their books and pay back deficits by the end of the financial year.

However, he stressed that this year the region was receiving an additional nine per cent in growth money from the Government.