The huge new investment in the health service will lead to a radical improvement in standards of care, the Health Secretary has promised.

Alan Milburn told MPs the extra billions for health in England announced in Wednesday's Budget will pay for thousands of extra doctors and nurses.

NHS plans

35,000 more nurses 15,000 more doctors 30,000 more therapists and scientists 40 new hospitals 500 primary care centres Councils penalised for bed-blocking New Commission for Healthcare Audit and Inspection More freedom for best hospitals and primary care trusts New GP and consultant contracts Financial incentives for staff to boost productivity

Hospitals will be offered financial incentives, paying them by results to achieve higher standards.

And patients will have a greater choice over when and where they are treated.

The aim is for money to follow the patient - echoing the central tenet of the controversial internal market established by the Tories.

Mr Milburn said that waiting times for hospital operations will fall to an average of just six weeks by 2008.

Spelling out the government's plans for the health service, Mr Milburn revealed councils will in future be penalised for failing to provide alternative accommodation for patients stuck unnecessarily in hospitals.

Inspectorate

He also announced plans for a new Commission for Healthcare Audit and Inspection to ensure that the extra investment provides value for money. It will also enforce standards in the private sector.

Where more resources are going in people have a right to know what they are getting out Health Secretary Alan Milburn

The new commission, which will be independent of ministers and will report annually to parliament, will examine how taxpayers' money is being spent.

An equivalent body will be created for social services.

Mr Milburn told MPs: "The government should not be judge and jury on the NHS. The commission will be the judge. The British people will be the jury.

"Where more resources are going in people have a right to know what they are getting out."

Significantly, the health secretary said the increases in NHS funding would help to pay for thousands of extra staff.

He pledged 35,000 more nurses, 15,000 more doctors, 40 new hospitals and 500 primary care centres over the next 10 years.

Mr Milburn also revealed plans to give patients greater choice over where they are treated.

Patients who have been waiting more than six months for a heart operation will in future be able to chose to have treatment at another NHS hospital or in the private sector.

Within three years all patients, with their GPs, will be able to book hospital appointments at a time and a place that is convenient to them.

Ministers also want lots more work done in the private sector, including foreign companies setting up small surgical clinics.

"Hospitals will no longer chose patients. Patients will chose hospitals," Mr Milburn said.

In addition, Mr Milburn pledged to tackle the problem of bed-blocking which sees many elderly patients staying in hospital after treatment needlessly because they have no where else to go.

Council penalties

The health secretary said councils would in future be required by law to ensure elderly patients do not remain in hospital if their treatment has been completed.

Local authorities will be given more cash, but will face penalities if they fail to produce the goods.

"If bed blocking goes up councils will incur the cost of keeping older people in hospital unnecessarily. There will be similar incentives to prevent hospitals seeking to discharge patients prematurely," he said.

Dr Fox criticised the plans

At the same time the best-performing hospitals and primary care trusts will be given greater financial freedom. They will be able to borrow money to expand services and "radically alter" the way staff work.

NHS staff will also be given new financial incentives to boost productivity.

"There will be new contracts of employment for GPs and hospitals consultants," Mr Milburn said.

"We want to liberate the potential of all NHS staff, reward those who do most in the NHS and crucially improve porodcutivy across the NHS."

But he added: "Investment in the NHS must be accompanied by changes in the way the NHS works.

"Ours is not an unconditional offer. Without the reforms we will not get the best use of the money for the taxpayer, and we will not get the improvements in service for the patient."

But shadow health secretary Liam Fox said the government had failed to outline any reforms.

"[Mr Milburn's] statement must be judged by the criteria set down by the chancellor yesterday when he said the scale of long-term investment would be matched by the scale of long-term reform.

"Have we seen anything like the indication of long-term reform today that comes anywhere close to the increase in funding announced by the chancellor?"