Milburn's £100bn challenge

Health Secretary Alan Milburn has been handed the most generous package of investment in the history of the NHS.

Spending on the health service is set to rise to more than £100 billion in five years, and Mr Milburn is expected to extend the system of "traffic light funding" which rewards successful hospital trusts for reaching Government targets.

The system categorises hospitals as red, amber or green based on their success or failure with the targets. Those in the green category could get even more autonomy and control over budgets, while those deemed to be failing will see funding directed to particular areas to raise standards.

Mr Milburn is also expected to devolve more power to front-line NHS staff. Eventually 75 per cent of local budgets will be in the hands of Primary Care Trusts - minihealth authorities led by GPs.

There is also likely to be a significant increase in budgets for information technology, as recommended in the Wanless report.

Extra investment in social services and the care-home sector is anticipated, in a bid to solve the problem of "bed-blocking" elderly patients.

Mr Milburn may also decide to ring-fence cancer funding after criticism that cash is not getting through to the front line.

The pressure on managers and clinicians is set to intensify to help achieve the political gamble of promising vast improvements in the health service. Tony Blair has committed himself to being judged on improving the NHS. There are fears that much of the additional money will come with strings attached, either by the Health Department prescribing where it should be spent or insisting certain targets, such as reducing waiting times, are met.

The investment has initially had a warm welcome from patient groups and health workers but with the caveat that it must be wisely invested. Dave Prentis, of public-sector union Unison, said: "The Chancellor has given the NHS the kiss of life. We congratulate the Government for having the courage of its convictions to do the right thing by our health and public services."

However, Mike Stone, director of the Patients' Association, said: "It is all very well increasing investment, but there is no guarantee we will end up with a better NHS. We need a change in culture within the NHS. Management needs to be looked at and improved to make sure the money does not just disappear into a black hole and the organisation needs to be more patient-focused."

Sir Peter Morris, president of the Royal College of Surgeons, said: "We can't expect improvements straight away. The NHS is still desperately short of beds, short of surgeons and other essential facilities."

Mr Milburn was today announcing a new independent body, the Commission for Health Care Inspection,to ensure the huge cash injection will drive up NHS standards.

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