FINANCES in the NHS have improved "markedly", according to the Audit Commission.

But the picture across East Lancashire is mixed, the spending watchdog's annual review of health service spending has discovered.

Auditors assessed NHS trusts and primary care trusts (PCTs) across England on how well they manage taxpayers' money, giving them a rating of inadequate, adequate, good or performing strongly.

East Lancashire Hospitals NHS Trust, which broke even in 2006-07 after achieving savings of £11.6 million, have only been given an adequate' rating overall.

This means the trust, which looks after the Royal Blackburn and Burnley General hospitals, is only meeting minimum accounting requirements overall.

Similar ratings have been achieved though by the Nelson-based East Lancashire Primary Care Trust, which had a year-end surplus, and Blackburn with Darwen Primary Care Trust, which was also in the black.

Mental health trust Lancashire Care earned a good' rating, as did Whalley-based Calderstones Hospital, which treats patients with learning disabilities.

Nationally, the NHS has moved from deficit to surplus, but the commission's review of the health service's financial year 2006/7 showed nearly a third of local trusts are still struggling.

Steve Bundred, Audit Commission chief executive, said: "There is a worrying gap between the top performers and those still failing to meet their duty to balance their books."

Auditors found that 27 per cent of trusts and PCTs performed well or strongly, but 31 per cent were still failing to meet minimum requirements.

Eight per cent of trusts and PCTs failed across all three key areas: financial management, financial standing and value for money.