The prediction is based on the first six months of the financial year and is subject to fluctuation until April 2008.
The position compares with a deficit of £547 million at the end of 2005/6.
The DoH explained that the surplus represents 2.3 per cent of the NHS budget. It will sit within the NHS and will be spent on further improving services and patient care.
The DoH forecast breaks NHS finances down to trust level.
All SHAs are forecasting a surplus for 2007/8 but within those figures 25 trusts (including 11 PCTs) are predicting deficits (see box). London, with five PCTS forecasting a deficit, is the SHA with the most.
Health secretary Alan Johnson defended the surplus while giving evidence to the Health Select Committee last week.
He said that a reasonable surplus would be a 'launch pad' for projects next year and was a sign of 'good financial management'.
However, a BMA spokesman said: 'An underspend means that money that should have been used to deliver services for patients has just been sitting there. What has happened to the services that were planned?
'Not balancing the books is bad news, but so is not using the resources to improve the health service.'
Gill Morgan, NHS Confederation chief executive, commented that: 'It is basic common sense to create a healthy reserve so that we can plan spending over the long term and reinvest in patient care for the future. This definitely is sound financial management.'
firstname.lastname@example.org - Do you think a £1.8 billion surplus is reasonable?
PCT ranked by deficit forecast for 2007/8
North Yorkshire and York: £19,179,000
North Somerset: £12m
Sutton and Merton: £3,952,000
Berkshire West: £3,846,000
Waltham Forest: £814,000
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