The government has announced that it will be investing 'a record' £2.2bn in hospital buildings and equipment next year.

Health minister Alan Milburn said NHS capital spending will increase by 19 per cent from April, once projected spending through the private finance initiative is included.

But it is already clear that large sums of money will be earmarked for specific projects.

Mr Milburn insisted the cash must be spent on 'modern and reliable' equipment, 'eliminating mixed-sex accommodation', improving outpatient departments and meeting statutory fire safety and disabled access requirements.

The£2.2bn headline figure includes a 7.5 per cent increase in public sector capital to£1.3bn.

The private finance initiative is expected to contribute£610m and the NHS modernisation fund£70m, with the remainder coming from land sales.

Mr Milburn said£30m of the modernisation fund monies would be used to refurbish one in four accident and emergency departments by 2000.

A Department of Health spokesperson said trusts would have to 'bid' for public capital and modernisation fund cash. 'Actual allocations will only take place once (trusts) have submitted details of how they will spend the cash.'

Capital funds will be ringfenced so trusts cannot use them to 'make up shortfalls in revenue spending', the spokesperson added.

Trust finance directors said the total figure was 'in line with expectations' but welcomed measures to protect capital funds.

Eric Morton, chair-elect of the Healthcare Financial Management Association, said: 'There is a very clear commitment that cash set aside for capital purposes will be used for that.'

But he warned that 'it will expose some trusts' financial difficulties if this cash is no longer available'.

Mr Morton said the government had also imposed a 'new hurdle' by requiring plans to be submitted to NHS regional offices before monies were awarded.

Accountants said the fund was 'a modest step up in resources' that was 'not enough' to reverse 'years of neglect of hospital buildings'.

Tom Jones, health spokesman for the Association of Chartered Certified Accountants said: 'An extra 7.5 per cent real-terms growth doesn't really plug the gap.'

There were 'a lot more problems' than that level of funding could meet and the government was focusing on 'refurbishment rather than some much-needed replacement of old stock', he said.

The£610m PFI investment was 'no substitute' for increased public-sector spending, he added.

Mr Morton said the PFI element was 'reasonable' and 'based on schemes that were already there in the public domain'.