Big pay rises prove irresistible, but where will the cuts fall?

Key parts of the NHS modernisation programme were always going to suffer if pay rises were not kept to 3 per cent. Hence ministers' initial attempt to alter the review bodies' terms of reference.

That came to nothing, and in any case, clamping down on pay with recruitment already difficult would have scuppered plans for thousands more doctors and nurses, on which much of the modernisation will rely. So the logic of a big rise became irresistible. Government policy is always riddled with such contradictions.

Here is another: the NHS will have to find further efficiency savings to meet the cost of the pay award. As well as stalling modernisation initiatives in the most hard-pressed health authorities, savings of that magnitude will only be achieved by closing beds. What price, cutting waiting lists, then? That's not all. Sources suggest that the review of bed numbers ordered by health secretary Frank Dobson will tell him that too many have closed already. Stand by for yet another frustrating year.