The NHS’s £2.1bn (€2.4bn; $3.1bn) surplus for 2007-8 will not be clawed back by the Treasury, said the head of the organisation, who has told MPs that the money is safe with local NHS organisations.

The chief executive, David Nicholson, told the parliamentary health select committee that the money was already in the hands of NHS organisations and that the Department of Health was talking to them about how best to spend it.

Figures published by the select committee just ahead of its annual inquiry into public spending on health and personal social services show that the total net surplus for 2007-8 in the NHS in England was £2.1bn, four times greater than in the previous …