NHS savings go to tumour treatment

Frank Dobson, Secretary of State for Health, announced that he was taking an axe to the "dense forests of paperwork" that have grown up in the National Health Service yesterday - but his axe turned out to be blunter than it appeared, writes Jeremy Laurence.

Savings of pounds 100m would be achieved in the first year, in line with Labour's manifesto pledge, by deferring the eighth wave of GP fundholders and setting tough new management cost targets for NHS trusts and health authorities, he said. An immediate allocation of pounds 10 m would go to cut waiting times for breast cancer treatment.

Mr Dobson said delaying further entrants to fundholding, affecting 1,000 GPs, would save pounds 20m with the rest to come from cuts in bureaucracy. Target reductions would be agreed by the end of June.

However, figures show that pounds 46m of management savings were already planned by the last government and included in this year's budget - leaving the NHS executive to find a further pounds 34m by next April. Total savings achieved by Labour's measures will therefore yield pounds 54m, just over half the pounds 100m pledged.

Mr Dobson, giving his first formal press conference in the post, said he had found the state of the service to be worse than expected, with waiting lists 100,000 higher than a year ago and many hospitals carrying deficits estimated by the British Medical Association at pounds 750m.

"Taxpayers' money must be used to treat patients, not to sustain the dense forests of paperwork which have grown as a result of the NHS internal market," he said. Some staff could lose their jobs and vacancies would be left unfilled.

He was surprisingly generous towards GP fundholding, saying "Maybe there are aspects of fundholding that are valuable and can be continued into the new system."