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Pay swallows cash injection

More than half of the £3.6 billion increase in health spending this year has been swallowed up in pay increases.

A report from health think-tank the King's Fund, based on latest Government statistics, found that only 13 per cent of the extra investment was left for developing NHS services and meeting targets such as waiting times.

The situation is set to improve marginally next year, but 72 per cent of the expected £4.5 billion increase for 2006/7 will still go on pay, inflationary pressures from NICE guidelines and clinical negligence payouts.

Around £1.2 billion will be left to help the NHS achieve Government targets.

Professor John Appleby, chief economist for the King's Fund said the findings were 'worrying' and called into question the value for money of pay rises for nurses and consultants.

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