Few involved in NHS finances will be surprised by the Treasury white paper's £1bn savings target for health service running costs (See News, pages 4-5). The chancellor first announced the figure last July when he set out the results of the comprehensive spending review.

Nor will there be a great deal of surprise at the introduction of public service agreements between the Treasury and individual spending departments. For all that ministers may like the freedom to dispose of their departmental billions as they wish, that is just not the way this government works.

But what may raise a few eyebrows is the identity of some of those charged with overseeing the agreements and ensuring the Department of Health and others deliver. For there is none other than Dame Sheila Masters. If you have a long memory, you will recall Dame Sheila. As finance director of the NHS management executive from 1988-91, and subsequently as a member of the now-defunct NHS policy board, she perhaps more than anyone was responsible for making the Conservative health reforms work.

Not for nothing was it suggested at the time that IHSM stood for I Hate Sheila Masters. Nor did she get on with Margaret Beckett, who as shadow health secretary was displeased by her prediction that a Labour government would adopt the private finance initiative. Perhaps Ms Masters has reinvented herself. For we are all New Labour now.

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