The Government has honoured its commitment to protect the NHS by promising above inflation rises in the health service budget over the next four years as part of its Comprehensive Spending Review.

The announcement from Chancellor George Osborne, made to Parliament on October 19, means the NHS budget will rise from around £104 billion this year to £114 billion by 2014/15.

But while the actual budget is safeguarded, Mr Osborne said he also wants to see productivity savings of up to £20 billion a year over the next four years to help the health service cope with increasing pressures from an ageing population and the rising cost of new medicines.

The Chancellor said: “The NHS is an intrinsic part of the fabric of our country. It is the embodiment of a fair society.”

As a result, the Government would “honour” the agreement it previously made to protect the NHS by announcing a rise in total health spending each year over and above inflation.

But Mr Osborne added: “That does not mean we are letting the Health department off the need to drive forward real reform and savings from waste and inefficiency."

He also said that social care would get an extra £2 billion over the next four years in order to help the most vulnerable.

But while health ministers say all savings from the efficiency drive will be reinvested into the NHS, unions are worried about job losses.

Paul Vaughan, Royal College of Nursing director for the West Midlands, said: “We’re concerned that despite the Government’s promise to ring fence funding for the NHS, trusts on the ground have been directed to make millions of pounds of savings to compensate for lower increases in their budgets over the next few years.

”We already have evidence of 10,000 posts in the NHS across the country that are earmarked for cuts through redundancy and, less visibly, through recruitment freezes or staff not being replaced when they leave or retire.

“This year alone, the major hospitals in Birmingham face having to find more than £66 million in savings, and this squeeze on funding will continue into next year and beyond.

“Nurses and health care assistants are telling us that they are already under great pressure to do more with less.

“We recognise that savings do need to be found, but these must not be at the expense of patient care, nor must they make the nursing workload completely unmanageable."

He added: ”One of the lessons of the failings at Stafford Hospital was the link between unacceptably low staffing levels and patient safety, so it’s paramount that frontline jobs and services are protected.”