In an interview with the BBC the Prime Minister Tony Blair said NHS spending should match that of other EU countries in five years. Health correspondent Richard Hannaford explains what this means.

How much extra money has Mr Blair promised the NHS?
The government says it is providing the NHS with an extra £21bn (although many critics claim this is overstates the case). The present funding round will last until 2001. So far all Mr Blair is saying is that the government will put in even more money in the future.

As a guide he says total health spending should equal 8% of GDP - the current average for all health spending (private and public) in the European Union. With GDP running at £857bn (98-99) 8% would equal £68.5bn. At the moment the UK spends about £50bn on the NHS and about £8.5bn on the private sector. If private health spending remained static, in purely cash terms, that would mean an increase of about £10bn. However that figure is likely to rise because of inflation and increases in the economy.

When will it come into effect?
The current funding round ends in 2001. Extra money will then be announced. Government sources suggest that by the year 2006 the UK should be spending should equal the 8% the Prime Minister was speaking about.

Why has he announced it now?
Clearly the government has been on the defensive over the past two weeks. The flu outbreak has led to a spate of stories about operations being cancelled and suggestions that the NHS is getting worse not better. Apearing in a BBC TV interview the Prime Minister needed to have some good news to announce. Part of that was the above inflation pay rises for NHS staff. But saying that more money would be invested in future was also helpful.

What will the money be used for?
About 70% of the NHS budget is spent on staff salaries. If there are more above inflation rises that proportion will also go up. Other developments must include cutting waiting lists, increasing the performance of cancer and heart disease treatments, and developing services in the community. New technology will also be high on the agenda.

How will NHS funding now compare to rest of EU?
Currently the UK spends 6.7% on health, while the rest of the Europe Union spends 8%. In fact some like Germany spend more than 10%. The United States spends as much as 14%. However comparisons are difficult because many European countries fund their health services differently, with more being spent in the private sector.