NHS makes £446m cuts to meet increased NI bill

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Health Secretary Andy Burnham said he has managed to identify "efficiency savings" to meet a bill for £446 million in employer contributions on the service's huge payroll.

The money will be taken out of health spending and paid to the Treasury every year from 2011.

Mr Burnham insisted that his scalpel had been wielded deftly enough to prevent key NHS services from being hit.

However, shadow chancellor George Osborne said the scale of the bill meant Labour could not avoid making "real cuts" in frontline health spending.

He said that reversing the National Insurance rise would be his priority as chancellor, in contrast to the banks bonus tax which the Conservatives say they will not oppose in the Commons.

The impact of the NICS increase emerged a day after Mr Darling justified his tax rises by pledging to protect NHS services, schools and police numbers. A one per cent rise in NICS will raise a total of £4.48 billion a year.

As Britain's biggest employer, the NHS was inevitably going to be hard hit and Conservative number-crunchers calculated that with a huge wage bill of £44.6 billion, the service would lose £446 million.

Tory officials claimed the bill would equate to 14,000 fewer NHS staff, which, shared equally between the current payroll would mean 1,000 fewer hospital doctors and 4,000 fewer nurses.

Mr Burnham did not dispute the cash figure but said it would come out of £10 billion savings. He went on the attack over unfunded Tory pledges. "We have identified £10 billion of efficiency savings that will both fund new pressures and deliver further improvements to patients," he said.

"Until the Tories can do the same and set out detailed plans for the NHS, it is another of Mr Osborne's cast-iron guarantees that will ring hollow."

The NHS has a vast army of staff, including 408,000 nurses, 143,000 technicians, over half a million support staff and tens of thousands each of doctors, ambulance crew and dentists.

It has to pay National Insurance contributions on all their salaries.