Deprived areas are set to benefit from health secretary Alan Milburn's announcement of the first three-year funding allocations for health authorities.

Every HA will receive an average 8.5 per cent increase in 200102, with a minimum 6 per cent increase in 2002-03 and 2003-04.

Next year's£37bn for HAs is a£2.9bn increase on 2000-01.

The NHS Confederation welcomed the allocations as 'a vote of confidence in NHS management'.

Chief executive Stephen Thornton said: 'We are particularly pleased that very little of the money has been earmarked.'

Deprived areas, mainly in the north of England, will be targeted, receiving£130m. And£65m will be allocated to meet prime minister Tony Blair's pledge of extra cost-of-living allowances for qualified nurses working in London and the south-east (see page 7).

Cancer and coronary heart disease are also targeted, with£255m for cancer treatment, including£170m for drugs, and£150m for coronary heart disease, with a sum ringfenced for drug treatments such as statins.

The announcement was accompanied by a new 15-month maximum waiting time pledge on operations by 2002.

'For the first time in the history of the NHS, I am today outlining allocations for the next three years, rather than just a single year ahead. . . There has been too much boom and bust spending in the past, 'Mr Milburn said.

The allocations follow approval for 16 private finance initiative hospital building schemes worth£350m in total.

Mr Milburn also invited proposals to build a further 18 hospital schemes over the next two years, worth£2.3bn.

He said he wanted to see 'not just an individual hospital here or there, but improvements in the whole local health community' from the next wave of PFI schemes.