The Government is to spend more than £1 billion more than it previously planned to fund improvements in GP care.

As promised by Lord Darzi, the junior Health Minister, last week, the Government will build 150 new health centres, open seven days a week, and 100 new GP practices in areas of England where a GP is hard to find.

Alistair Darling said yesterday that health spending would rise by 4 per cent a year over the next three years, slightly more than it has risen on average since 1987, but little more than half as fast as it has risen since 2002.

The figure is higher than most experts had predicted and means that spending on the NHS in England will rise from £90 billion this year to almost £110 billion in 2010. This rate of increase will be faster than that of public spending as a whole, reflecting the political belief that spending more on the NHS does not cost votes. Given that the NHS was in financial crisis when government spending was rising at more than 7 per cent a year, questions will be asked whether 4 per cent is enough. Sir Derek Wanless, who was once the Government’s health guru, had predicted that 4.4 per cent was the minimum growth needed by the NHS, and this was based on the assumption that the NHS’s productivity gains were 2.5 per cent a year and that people learnt to look after their own health much better.

Alan Johnson, the Health Secretary, said: “This is a good settlement for health and social care. Over the last decade we have invested to increase the capacity of the NHS so that the service is able to treat more people more quickly.”

The increase raises the amount the UK spends on health close to the European average as a proportion of GDP. The NHS remains, despite the increase in spending, as well as large investments in new hospitals, better heart and cancer care and huge reductions in waiting times for elective operations, the a patchy performer, at levels below the European average. Most of the increases have been soaked up by growing staff levels and salaries. While the privatised water, gas and electricity industries have been shedding jobs the NHS has been adding them, and claiming credit for doing so.

Sue Hodgetts, chief executive of the Institute of Healthcare Management, said: “Much of the previous period’s increased spending has been poured into pay settlements.

“Patients and the public will expect to see more bangs for their bucks in the future and that can only be delivered through better use of resources and allowing managers the freedom to deliver responsive local services effectively.”

The King’s Fund welcomed the announcement but warned the Chancellor that the Government needed to make significant improvements in NHS productivity and progress in tackling unhealthy lifestyles.

Niall Dixon, chief executive of the charity, said: “Reducing the annual real growth from what it has been over the last seven years will feel like a cut. But a slow-down in the growth of funding should not damage patient care as the NHS has been planning for this. In many ways, the NHS is in good shape to deal with lower growth in funding - it has more money, more staff, reduced waiting times, increasing patient satisfaction rates and no overall deficits.

“The danger is that if productivity doesn’t improve - and progress isn’t made on tackling rising levels of obesity in particular - then pressures to spend even more than recommended by the 2002 Wanless review will grow.

“Inevitably, this will lead to questions being raised about the long-term viability of the health service.”

Nigel Edwards, director of policy at the NHS Confederation, said that trusts would find the efficiency saving target a challenge. “Although there has been a tendency to criticise the NHS on value for money, recent reviews have suggested that the service has in fact made significant productivity gains, due to increases in the quality of care,” he said.

Andrew Haldenby, director of the think-tank Reform, said: “This year’s review is even more biased towards higher spending without reform than those of previous years. If the problems of the NHS and state schools were to be solved by an extra £2 billion, they would have been solved many years ago.”

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