Scottish health boards have been warned that a cash boost of 6. 5 per cent for the year ahead must not be mistaken for a 'blank cheque'.

Health minister Susan Deacon said the Scottish Executive would 'strictly monitor' the funding uplift - which is for the next two years - against improvements in national priorities, including cancer care, children's health and cleaner hospitals.

Every health board will receive an increase of at least 6. 5 per cent in 2002-03 and 7. 4 per cent the following year. Boards in areas recognised as having high levels of deprivation and those in rural communities will receive the highest increases to recognise their extra needs under the new Arbuthnott formula.

The new funding formula was announced last autumn following a three-year review of the way NHS funds were allocated.

The increases were broadly welcomed across the service, but some managers and unions were concerned that more investment would still be needed.

Dr Bob Masterton, deputy medical director of Lothian University Hospitals trust, which recently announced a cost-cutting programme to control its budget, said: 'I welcome the extra money, but trusts are under real financial pressures.

'Meeting the demands of the European working-time directive and the junior doctors' deal is expensive and even costs like sewage and water rates are going up by more than inflation.

Medical inflation, too, is much higher than ordinary inflation. '

Paul White, chief executive of embattled Tayside University Hospitals trust, which faces the largest deficit in Scotland, said the increase was 'a significant uplift, but of course we do not know whether it will still seem good in two years' time because we do not know what the situation will be. '

Jim Devine, the Scottish spokesman on health for Unison, said: 'The extra money is good, but It is not as good as it first appears when all the resource implications, like the pay bill and growing drugs bill, are taken into account. '

The biggest percentage increases go to Glasgow, Highland, Ayrshire and Arran and the Western Isles at 7. 3 per cent.

Fife gets 7 per cent, Lanarkshire and Dumfries and Galloway get a 6. 9 per cent rise and Forth Valley gets 6. 7 per cent, while the remainder get 6. 5 per cent.

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