Published: 17/04/2003, Volume II3, No. 5851 Page 19

This column set out to be a report on the chancellor's seventh budget statement and its implications for our corner of the Whitehall policy forest. But it has turned out to be a bit of an NHS whodunnit - or even a didn't-do-it.

Odd, really, but it was an odd occasion, thoroughly overshadowed by the war, but also by its own lack of dynamism.Gordon Brown rattled through his hour-long statement as if his trousers were on fire. That is normal. Truth is, he didn't have a lot new to say and rumour has it (I can't confirm this) that Tony Blair stopped him saying 'not yet' to the euro.

As many commentators noted, his taxspend-and-borrowing plans also look shaky.

That has serious implications for NHS reform.

If the economy does not bounce back from its current doldrums, he will have to raise taxes or borrowing to keep increasing NHS spending (growing at the present amazing rate of 7.2 per cent a year from 2002-03 to 2007-08).

That will put pressure on every GP, houseman and nurse. 'Why am I waiting when I am paying more?' irate patients will ask. Mr Brown has reappointed his loyal banker, Derek Wanless, to review progress. Spending that sort of extra cash is 'a very considerable management challenge', Wanless has already warned. HSJ readers already knew that.

Two other NHS points leapt from the Budget statement so obviously that even I noticed them. One was the chancellor's decision to abolish 'hotel charges' levied on pensions and benefits when recipients are in hospital.

'To those opposite who have advocated vouchers, fees or new health charges for medical services, [the government says 'no'], ' Mr Brown declared.

Some MPs thought 'those opposite' included Mr Blair, under whose name an article recently appeared citing 'co-payments', of which student fees are an example. I am assured that is not so. As for point two, I was astonished that barely a line about it appeared in next day's press.

Talking about regional policy and fairness, Mr Brown spoke of the 'extra costs for retention and recruitment in London and the South East, especially for the low paid'. He promised regional price indexes covering things like housing costs.

That is good news for nurses, ancilliaries and others struggling in the hotspots. But as the GMB and T&GWU protested (both have elections on) the move threatens national pay bargaining - much cherished by public sector unions, especially in regions where public pay is often higher than the private sector.

This is not an issue between Mr Brown and Alan Milburn. In the Agenda for Change talks, the health secretary confirmed national pay - buttressed by Brownite minimum wage and family tax credits - but insisted that local managers must have the flexibility to offer recruitment and retention money (up to 30 per cent) to reflect high costs in the South East.

Since Unison's London members have occasionally threatened strikes because of their inadequate allowances, the union took the point. It is the thin end of an important wedge. Yet one of the Treasury's arguments against foundation hospitals (sorry to use the F-word again) was that local management's freedom to bargain would lead to spiralling pay bidding in the hotspots.

So Mr B seems to be pointing both ways.

When I read in the weekend papers that the Budget guide, the so-called red book, had further restricted F-word hospitals' room for manoeuvre to appease would-be Labour rebels, I searched for it and am still looking.But there was nothing in the Financial Times that hasn't been said before by either Brown or Milburn. Reading the NHS bits of the red book, what is striking is that it is mostly supportive of the Milburn reforms and describes them in some detail.

Bees in the Brown bonnet buzz now and then (he is keen on 'the limits of markets' - ie where they do not work) and he happily boasts that by 2007-08 UK health spending will reach 9.4 per cent of GDP (£109.4bn), above the EU average.

The book attacks charges and the high costs to employers of French-style social insurance, it praises the Commission for Healthcare Audit and Inspection, the National Institute for Clinical Excellence and the new single national tarrif for NHS payments. But of foundation hospitals, I can find just one glancing reference and the F-word itself not a mention.