The health secretary has defended the rise in National Insurance contributions, which comes into effect this weekend.

As the government's increase in National Insurance kicks in, Alan Milburn has insisted the extra money is being well spent by the NHS.

Amid public scepticism over increased health spending, funded by a one per cent increase in NI contributions for both employers and employees, Milburn released a new report which said extra investment in the NHS "is delivering results for patients".

The report claims that the £55 billion being spent on the NHS - an increase of 10 per cent over last year - is improving the quality of services.

It revealed that £2.2 billion of the increase has been used to employ additional staff, increase prescribing and purchase more goods and services.

But it was confirmed that £1.6 billion has been swallowed up by pay increases - which ministers insist are essential if more staff are to be recruited to the frontline.

"This shows that extra resources in the NHS are being well used. In building capacity, not just for the short term but for the long term. In cutting waiting times for treatment and improving standards of care," said Milburn.

"The report gives the lie to those who say that resources in the NHS never deliver results. It follows the publication just a fortnight ago of the annual report from the Modernisation Board which, in my view, got it right when it said that resources are delivering dividends for patients."

He insisted that the "NHS is on the mend" but conceded it would take time to deliver the change demanded by patients.

"It is now turning the corner. The momentum is forwards. It is true of course there is a long way to go," said Milburn.

"There are still staff shortages that have to be plugged. New drugs and treatments that must be made more widely available. Better buildings, newer equipment, modern IT systems that are needed.

"The only way of dealing with those problems is to press on with investment in the NHS."

The Tories mocked the latest report, accusing the government of "fiddling the figures".

"Alan Milburn must think the British people were born yesterday," said shadow health secretary Liam Fox. "A report by the NHS for the NHS tells us that the NHS is doing a good job."

"Nobody should be taken in by Alan Milburn's claims. Despite the huge increase in funding, the NHS is in crisis."