An extra �2.7bn will be made available for the health service in Northern Ireland over the next five years, the government has said.

Northern Ireland Secretary John Reid said Chancellor Gordon Brown's Budget plans to increase spending on health throughout the UK would allow Northern Ireland to create a "world class health service fit for the 21st century".

"When you look at the amount of money being made available for health in Northern Ireland in today's Budget, you can see that this is a once in a lifetime opportunity for the Northern Ireland Executive to spend this money where it can really make a difference," he said.

Dr Reid said small businesses and families would also benefit.

John Reid: "Good news for health service"

"This is good news for quality public services, for the economy in Northern Ireland and for families."

He said the government had "done its bit" and it was now up to the Northern Ireland Executive to decide how the money allocated to the province through the block grant, would be spent.

Northern Ireland Health Minister Bairbre de Brun said she believed the executive would use the extra funding to pay for improvements in the service.

She said: "The executive has said health is a priority and I believe that there is a genuine recognition that far greater funding is needed and must come now."

Mr Brown announced National Insurance contributions would be raised by 1% to help pay for extra NHS funding of an average 7.4% in real terms each year, increasing from �65.4bn this year to �105.6bn in 2007/08.

Jeffrey Donaldson: "Cigarette duty rise will increase smuggling"

Ulster Unionist Party treasury spokesman Jeffrey Donaldson welcomed the chancellor's decision to increase NHS spending.

But he said Northern Ireland should be given an independent health service auditor as "there is little point in throwing money at the NHS without putting in place the measures that will guarantee that the extra funding will be properly and efficiently spent".

Mr Donaldson said he was disappointed that the chancellor increased duty on cigarettes.

Key points

1% on National Insurance payments �2.5bn extra for working families Freeze on alcohol duty 6p on a pack of cigarettes Road tax and fuel duties frozen

Click here for main Budget measures

There have been several major seizures of cargoes of cigarettes which have been smuggled to Northern Ireland in recent months. And local tobacconists have said the illegal trade is threatening to put them out of business.

Mr Donaldson said: "This will once again increase the likelihood of cross-border smuggling in the province."

Mr Brown announced a freeze on duties on beer, spirits and wine and an increase of six pence on the price of a pack of 20 cigarettes. Fuel duties are also being frozen.

The chancellor also announced extra payments directly to schools, saying education would receive priority in this Parliament.

He said this would mean an increase of �16,000 a year for a typical secondary school.

Families and children first in Brown's Budget
	Budget diaries A pensioner, a doctor and student give BBC News Online their Budget verdicts. Click here for more.

Mr Brown said there would be �2.5bn in extra support for six million families, with the new child tax credit available for those with joint incomes of up to �58,000 a year.

The chancellor also announced a number of measures aimed at boosting business.

However, the Federation of Small businesses for Northern Ireland said self-employed people would be hard hit by a "double budget blow".

Spokesman John Hurson said: "The rise in Employers' National Insurance is a direct increase in business costs and when combined with the increase in the employees' Northern Ireland contributions, this is the equivalent of an increase of 2p on income tax.

"It is a tragedy that the chancellor has decided that the self employed will also pay higher National Insurance contributions."

The federation welcomed the chancellor's decision to abolish corporation tax for small businesses with annual profits of less than �10,000, but said this would help only a third of small businesses in Northern Ireland.