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An additional £90 million Scottish executive funding has been made available to the health service in Scotland to allow new NHS boards to wipe out deficits.

The announcement was made by Susan Deacon, health minister, in the same week as it emerged that health and education services were the main beneficiaries of the reallocation of Scotland-wide underspends. The additional funding will prevent major crises in services such as the threatened 200 redundancies at Lothian University Trusts.

Overall, there was a £718 million underspend in Scotland representing approximately 4 per cent of total budgets and less than that of most Whitehall departments. This includes a massive £121.9 million underspend due to the delay in the transfer of Glasgow Council’s housing stock.

Departments are allowed to retain 75 per cent of underspend then bid for a share of the remaining pot.

In announcing that health was a major winner in this bidding process, deputy finance minister, Angus McKay, warned of tighter controls. McKay said: "I am concerned that the executive is not making use of the considerable growth in the Scottish budget as quickly as possible. I have therefore taken a much more rigorous approach to examining departmental underspends and their entitlement to carry forward money this year."

McKay is to introduce monitoring at quarterly intervals to force departments to justify their spending decisions throughout the financial year.