The chancellor rounded off his Budget munificence with a £1bn tonic for the NHS. Where's it all going? Lynn Eaton reports

Gordon Brown may have slipped in the announcement of a further£1bn for the NHS at the very end of his Budget, but it was hardly an after-thought: more an uplifting, feel-good note on which to end.

It certainly won plaudits all round. '£1bn tonic for the NHS' blazed The Sun; 'NHS given£1bn shot in the arm'was The Mirror's headline. The Times, stable mate of The Sun, also went with the '£1bn tonic for ageing hospital wards' line.

But while bolstering the NHS is enough to keep most voters happy in the run-up to the election, what does the announcement really mean for the health service?

The extra cash is relatively small in the larger scale of things - but Treasury officials were keen to emphasise that this is targeted money. Against an overall budget of around£45bn, the extra£1bn represents an annual increase of 5. 7 per cent a year, rather than the 5. 6 per cent that had been expected.

The Department of Health was this week due to announce details of primary care allocation, and further details on the rest of the spend will be made 'in time' (see news).

The NHS Confederation told HSJ they expected some of the spending to be left to the discretion of trusts.

The bare bones of the deal are:

An extra£1bn for the NHS UK-wide over the next three years, divided into£359m,£353m and£287m.

Ofthat,£839m will be spent in England. Details of the exact distribution for settlements to Scotland and Wales have yet to be finalised.

Within England the extra£839m will be split into:

£150m a year for capital investment, including new x-ray equipment and scanners, likely to be between£500,000-£1m per acute trust, which will be allocated directly to those trusts;

£135m over three years for recruitment and retention, split into£50m in 2001,£45m in 2002-03 and£40m in 2003-04;

The remaining£254m over three years has yet to be allocated.

The extra cash has been widely welcomed by the NHS.

'This is good news for so many of our ageing hospitals, ' said Stephen Thornton, chief executive of the NHS Confederation.

Good news, too, for the British Medical Association, Unison and the Royal College of Nursing, all of whom welcomed the recruitment drive.

But the King's Fund is concerned that the extra money is being given on central government terms: 'Health services can often make better use of extra money if there is more flexibility so that it can be spent increasing health priorities for local people, ' said a spokesperson.

'We need to be cautious about increasing the amount of central direction on where NHS money has to be spent. '

The best of the rest The King's Fund says that tackling child poverty through children's credit is 'a move in the right direction', towards improving child health.

The extensions to maternity benefits and maternity and paternity leave got the approval of the RCN. 'We'd like to see further investment in initiatives that help staff balance their caring responsibilities with their home life, 'said general secretary Christine Hancock.

The NHS Confederation felt the 'inflation only'decision on tobacco prices was 'disappointing'.

Local councils failed to get extra cash for residential and nursing care to avoid bed-blocking, despite having overspent by£200m in the current financial year on care of elderly people and children. 'I am not prepared to say it will increase bed blocking, 'said John Ransford, of the Local Government Association. 'But it does mean the pressure is building up. It is very tight. '

Former drug addicts who claim benefits will be offered mentoring to get them back into work.

Disability benefits increased more than expected, with a guaranteed weekly income of£142 for severely disabled people.

Pharmaceutical firms which show social commitment will get extended tax credits.