The Chancellor's announcement of an extra �1bn for the NHS has received a warm welcome from health workers.

Every acute trust in the country is to receive up to �1.5m over the next three years to improve services, and a �135m fund is to be set up to recruit front line NHS staff.

Stephen Thornton, chief executive of the NHS Confederation, which represents health authorities and trusts, said: "This is very good news for so many of our ageing hospitals.

"We have argued for some time that investment is needed to improve the fabric of buildings and the environment for patients.

"This money will also enable hospitals to invest in much needed new medical equipment."

Mr Thornton also welcomed the recruitment fund.

He said: "Our only disappointment is that the cost of tobacco products is only rising in line with inflation, remembering that smoking is one of this country's biggest killers."

Doctors

Professor Sir George Alberti, president of the Royal College of Physicians, also welcomed greater investment in the NHS - but warned more was needed.

He said: "The facilities money will make a big difference to local environments and helps redress the decades of capital underspending, whilst the recruitment money will, we hope, help reverse the chronic understaffing that bedevils attempts to improve care.

"These are steps in the right direction, but many more steps will be needed before we have a health service of which we are proud."

Dr John Chisholm chairman of the British Medical Association's GP Committee warned that the recruitment drive must pay special attention to boosting the number of family doctors.

He said: "We are desperately short of family doctors.

"There is a crisis in general practice recruitment and retention which must be taken seriously by government and urgently addressed."

Pharmaceutical firms

The Association of the British Pharmaceutical Industry (ABPI) welcomed the announcement of tax credits for research and development companies.

British drugs firms spend around �7 million-a-day researching new medicines and therapies, ABPI director Dr Trevor Jones said.

But it takes between 10 and 12 years from researching a new drug to it being made available to patients.

Dr Jones said: "This is just the type of support that will reward entrepreneurial, innovative research and development in the field of medicines research.

"We are particularly anxious that the biomedical industry should benefit from government encouragement, as many of these are small, start-up companies that are research-intensive but not earning revenue."