Peter Riddell examines the health issues likely to be at the heart of the party conference agenda

gordon brown's announcement of record increases in health spending in the April Budget was supposed to end the debate about the future of the NHS. The very scale of the rises was intended to answer critics both among health professionals and within the Labour Party, while the publication of the Treasury commissioned report by former bank executive Derek Wanless was used by Mr Brown to argue that there were no workable alternatives to a taxpayer funded system.

But, in the event, the Budget statement marked the start rather than the end of the public debate, both about the uses of the money and what the government insisted were essential reforms in the way the NHS operates. The two are related. Spending is due to rise by a record amount up to the next general election, by 7.4 per cent annually in real, inflation adjusted terms in the three years up to 2005-06. This is double the average rate of increase in spending for other programmes.

These increases have been welcomed by health professionals and public sector unions, but has been treated as an opportunity for negotiation and for increases in pay rather than as a gratefully accepted gift. Similarly ministers' proposals to change working practices have faced a critical reception.

Hence, there have been tense negotiations over both consultants' and GPs' contracts, as well as over nurses' pay: over the government's desire to secure more flexible conditions and pay deals lasting for three years. The trickiest issue in the new consultant contract was the government's proposal to prevent new consultants from performing private work for seven years after appointment. This ban was lifted after the British Medical Association agreed to a provision giving the NHS exclusive use of newly appointed consultants' time for up to 48 hours a week after their appointment. Under the contract, consultants will be prevented from doing private work in NHS time and their hours will be timetabled for the first time. All this is to maximise the efficiency of hospitals and to avoid under-use of facilities, especially operating theatres.

Doubts are continuing over the GPs' contract because of doctors' worries over the level of funding for primary care. Their contract is intended to reduce the amount of paperwork, allowing more time for consultation with patients, with some GP responsibilities passed to other health care professionals, such as practice nurses.

At the same time, public sector unions have been pressing not only for substantial pay increases, but have also been renewing their campaign against increased private sector involvement. Unison and the GMB have been particularly opposed to private sector provision of clinical services and an expansion of the Private Finance Initiative, which now plays a central role in capital projects such as new hospitals. This question threatened to produce deep divisions during last year's party conference season, but a row was averted by the September 11 attacks which occurred just before Tony Blair was due to address the TUC conference. The unions are now renewing their campaign, focusing on questions such as the terms and conditions of workers transferred to the private sector and pension rights.

Alan Milburn, the Health Secretary, has been strongly committed to extending public/private partnerships, to extend diversity of provision and give patients a greater choice. The main move in this direction- the proposed creation of freestanding Foundation Hospitals from among trusts awarded three stars under the NHS ranking system- has run into trouble in an unexpected way. Not only have public sector unions been critical because of fears of creeping privatisation and a two tier NHS, but the Treasury has raised objections to the proposal to allow such Foundation Hospitals to make borrowings on their own account to finance capital spending. The Treasury is worried that, if over-ambitious hospitals run into trouble, the government will have to bail them out. Critics of these hospitals also argue that they will take more private and foreign, rather than NHS, patients, a claim firmly rejected by Mr Milburn..

This dispute is fundamental to how far the government is willing to break up the previous monopoly of NHS provision to encourage greater patient choice. There is a distinct difference of emphasis between Mr Blair's desire to move further in this direction and Mr Brown's greater caution and commitment to state provision..

Aside from these very public arguments, the most surprising feature of the debate since the April Budget has been the dog that did not bark. Ministers believed they were taking a huge political gamble by raising taxes through an increase in national insurance contributions. After all the tax and spend agonising of the past decade, how would the public react to a tax rise? Quite happily, it has appeared so far. Far from the much discussed hostile reaction, the announcement of the tax rise has been widely supported by the public, according to opinion polls. This is because people approve of where the money is being spent..

But this verdict needs to be treated with caution. Firstly the increase in contributions will not be felt in peoples' pay packets until next April. And, secondly, the public will want to see evidence of real improvements in their local health services- to see that their money is being well spent..

The positive initial public reaction to the NHS plans has, at least, temporarily taken the ground away from the Opposition parties. Both the Conservatives and the Liberal Democrats have grumbled about over-centralisation, too many targets and not enough freedom for doctors and health professionals to exercise their clinical judgements. But they have, so far, not offered any alternatives..

Liam Fox, the Tory health spokesman, has gone a number of visits around Europe with the aim of showing of where health provision is better under alternative systems: in particular, where waiting lists are shorter. Dr Fox has talked of ending the traditional state monopoly. But apart from declining to commit themselves to Labour's spending plans, the Tories have been very wary about spelling out their ideas either on extending private funding or on increasing diversity of provision. However more of the party's thinking is expected to be unveiled at the conference in Bournemouth in October.

Health will remain at the forefront of the public debate as the government seeks to push along reform as fast as possible to secure improvements on the ground. Ministers know they have two to three years at most to show that the NHS is going in the right direction..