Patients seem to be more satisfied

The NHS Modernisation Board, which is made up of staff, patients and the public, published a report on Monday highlighting continuing difficulties with limited capacity, old buildings and out-dated equipment.

However, the report also says there is mounting evidence that more money was reaching the front line in the health service.

Some achievements in reducing waiting times and boosting standards of care are also noted.

The prime minister's official spokesman conceded that parts of the report would not make comfortable reading for ministers.

It says progress has been made towards achieving the targets in the NHS Plan, only two years in - but investment still needs to be made to make a long-term difference.

It says morale is improving in the NHS among staff in many areas, but not pronouncedly so among doctors.

However, it is upbeat about an improvement in levels of patient satisfaction.

Nursing recruitment is another area where the board identifies significant improvement.

Wide-ranging survey

But it also flags up the need for more work and investment to get more doctors into the NHS.

It identifies a major theme as the need to increase medical capacity in hospitals and primary care.

The report is the most wide-ranging survey of the government's reform and investment programme for the NHS.

It comes at a sensitive time for the government as it devotes much of its time to the Iraq crisis and faces a backbench revolt over its plans for foundation hospitals.

These "centres of excellence" are being criticised by those who believe their capacity to raise private capital and pay higher wages will see them prosper at a massive cost to non-foundation hospitals.

Political reaction

Health Secretary Alan Milburn described the report as a "reasonable assessment" of what was going on in the NHS.

He said: "Essentially the report says the NHS Plan is on schedule, improvements are coming through, and most importantly of all the extra money is beginning to pay dividends for patients.

"But obviously there is a long way to go, and it is going to take time to recruit the doctors, nurses and other staff that the NHS needs."

Shadow Health Secretary Dr Liam Fox said: "The government has repeatedly ignored what everyone else has said about the crisis gripping the NHS.

"Since the NHS Modernisation Board was created by Tony Blair and Alan Milburn, I would hope that they will listen to what they have to say.

"Until they do listen, patients and staff will continue to suffer."

Dr Evan Harris, for the Liberal Democrats, said: "This report is the strongest message yet that the government was foolish to expect significant increases in capacity and activity without investing the resources needed in the first five years of its tenure.

"The government doesn't understand that it's not simply spending more money that matters, but spending it more wisely."

Dr Ian Bogle, British Medical Association council chairman, said: "I appreciate and recognise the investment in the NHS and the improvements which are underway but a great deal of work remains to be done.

"NHS staff still need to see the new investment coming through more clearly in their day to day work."

The Royal College of Nursing said continuing reform was dependent on being able to attract and retain more nurses to the NHS.

This could only be done through better pay and conditions, and an improvement in career structure.