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Last Updated: Tuesday, 9 October 2007, 15:15 GMT 16:15 UK
Growth in health spending slows
The NHS has enjoyed record increases
The rate of growth in NHS spending in England will slow over the next three years to 4% a year over the rate of inflation.

This will mean the budget will rise from 90bn this year to 110bn in 2010.

Chancellor Alistair Darling said cash would fund 20 new hospitals, 140 new walk-in centres open seven days a week, and 100 new GP practices.

However, since 2002, the health service has enjoyed record yearly rises of over 7% after inflation.

The NHS has done well compared with other departments
Niall Dickson
King's Fund

And the new increases fall short of those recommended by former banker Sir Derek Wanless in his review of the future of the NHS.

He recommended real terms growth in the NHS budget of at least 4.4% for the four years from April 2008.

Productivity boost needed

The independent think tank the King's Fund said the onus would now be on the NHS to improve productivity, and make progress in tackling unhealthy lifestyles.

Niall Dickson, the chief executive, said: "Reducing the annual real growth from what it has been over the last seven years will feel like a cut.

"However, in a fiscally tight spending review, the NHS has done well compared with other departments.

"A slow-down in the growth of funding should not damage patient care and the delivery of better services as the NHS has been planning for this slow down."


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Professor John Appleby, the King's Fund's finance expert, said the new figures included around 1.8bn which had been clawed back this year after trusts failed to spend it on capital projects.

Once this figure was taken into account the average rate of growth was closer to 3.1% a year over three years.

Doctors response

Dr Hamish Meldrum, chairman of British Medical Association, said it was vital funds were not squandered on "costly and poor value" deals with the private sector.

"The government has indicated its wish for greater clinical engagement in the NHS and we will be seeking a constructive dialogue to ensure that doctors have the freedom to innovate and develop their services, based on sound clinical evidence, that will truly benefit patients."

Nigel Edwards, of the NHS Confederation, said the NHS was now well placed to face a "challenging financial future and continue to improve the service for patients".

Dave Prentis, general secretary of the health workers' union Unison, said: "We are glad that the Chancellor has not lost his nerve and slammed the brakes on public service investment.

"The additional funds for the NHS will help see through health modernisation plans and prevent a return to the financial deficits dogging many health trusts in the recent past."

The period of record investment which ends this year saw the NHS budget grow annually by more than twice the average rate of the previous three decades prior to 1997.

This lifted spending on the NHS close to the European average, as promised by former Prime Minister Tony Blair.

However, structural change, and big pay rises for doctors accounted for a big slice of the cash, and left the health service in deficit before it managed to balance the books in the last financial year.

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