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The Health Secretary, Alan Milburn
"What I'm doing is answering the call from front line NHS staff"
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Tuesday, 28 March, 2000, 16:30 GMT 17:30 UK
Milburn ties health cash to peformance
The first tranche of money will be given straight to hospitals
Health Secretary Alan Milburn has begun detailing how the extra millions announced for the health service in last week's Budget will be carved up.

Mr Milburn told MPs that 660m would be ploughed into hospitals and he challenged health professionals to channel the new funds directly into improving frontline patient services.

We have provided the extra resources that were being called for National Health Service. Now the challenge for health authorities is to use that money to good effect.

Alan Milburn
But controversially the money will by-pass local health authorities and go straight to hospitals.

Mr Milburn told the Commons 600m was "to be allocated today from the extra resources that the chancellor announced in his Budget for the NHS".

"The new resources will put local health services on a sound financial footing, help prepare better for winter, tackle waiting lists and times and implement NICE [The National Institute for Clinical Excellence] recommendations."

He also unveiled a 60m bonus fund that will be used to reward good performance among health authorities on achieving local targets.

Cash will be allocated in 15m tranches every three months to NHS Trusts and Primary Care Groups that meet their targets.

To qualify they will have to put in a place an "action plan" showing how they will meet those targets.

Serving the front

Mr Milburn said: "We have provided the extra resources that were being called for National Health Service. Now the challenge for health authorities is to use that money to good effect, to get it to the frontline and start making a difference that patients can see."

ALan Milburn
Alan Milburn: Hoping to improve frontline services
Giving the money straight to hospitals is a tactic that has already been used in education with Education Secretary David Blunkett handing money directly to schools to ensure that resources go directly to the classroom.

Ministers argue the new approach will cut out bureaucracy, although critics in the NHS say health authorities are best placed to understand the needs of local communities.

Stripped of power

The move leaves health authorities with a smaller role than ever.

Addressing the issue of performance earlier on Tuesday Mr Milburn told BBC Radio 4's The World at One: "If there are poor hospitals, they will have an opportunity to gain the performance money, providing they can hit their targets.

"If, consistently, they fail to perform then what I will do is sanction intervention in those hospitals because frankly it is neither fair to the frontline staff nor to the patients that the hospital continues to fail."

Dr John Chisholm, chairman of the British Medical Association's committee for GPs, welcomed the targeting of funds.

But he added: "Obviously if good performance is to be rewarded we want to make sure that people are confident that the right areas are being targeted and that performance is measured in a valid way."

But Conservative health spokesman Philip Hammond demanded an assurance that the 600m would be used to address the "grotesque distortions in funding" between different areas of the NHS.

He pointed out that NHS spending in his constituency was 615 per person while it was 730 per head in the health secretary's seat.

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See also:

21 Mar 00 | Budget2000
Billions for the NHS
21 Mar 00 | Budget2000
NHS funding: The reaction
22 Mar 00 | Health
NHS reform: Blair takes charge
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