A £32m performance fund has been created to encourage health authorities to meet new waiting list targets.

Health secretary Frank Dobson said 10 per cent of the£320m earmarked for cutting lists in the Budget would be used as 'a carrot and a stick' to get the overall list back to 1.16 million by March.

HAs likely to meet targets being drawn up at the moment could receive extra money to do 'even more operations' next autumn and winter. But HAs likely to miss their targets could see their share of the money given to regional waiting list task forces for 'remedial action'.

An extra£500m was found for the NHS in the budget, of which£320m was earmarked for action on waiting lists in England.

HAs will receive£288m of this money directly,£32m will go into the performance fund and£97m will be invested in winter pressures initiatives.