AS major changes in the structure of the health service are under consideration, the government has announced that most Primary Care Trusts in the West Midlands would lose cash payments they had been expecting.

The prognosis for the future of the service is far from healthy, reports news editor Tony Donnelly.

CASH-STRAPPED South Worcestershire Primary Care Trust is to have its government funding slashed by more than £3.5 million next year, according to figures released last week.

And with the introduction of a new scheme in which all PCTs will contribute to a "NHS bank", the shortfall in South Worcestershire could reach £13 million.

"This is bound to have a significant impact on developments and we are currently re-examining our investment plans to ensure we do not spend more than we have," said Paul Bates, the PCT's acting chief executive.

The two other PCTs in Worcestershire, Wyre Forest and Redditch and Bromsgrove, are also affected by the cuts with Wyre Forest losing out on almost £1 million. However, Redditch & Bromsgrove is set to gain an additional £638,000.

Health secretary Patricia Hewitt has already conceded that the NHS would end the current financial year more than £200 million in deficit.

The latest financial blow is a result of the government phasing out a scheme called the purchaser parity adjustment earlier than expected.

This gave extra funding to health trusts in regions where costs were higher than average.

In just 12 months, the financial year 2006/07, trusts in the West Midlands region will lose £56.43 million. Across England as a whole, hospitals will lose £320.23 million.

Mr Bates said in a statement this week: "The Department of Health has announced changes in the method of allocating funds to Primary Care Trusts to support the system of Payments by Results.

"Unfortunately, for South Worcestershire Primary Care Trust this means a reduction in resources of £3.7 million.

"In addition, all Primary Care Trusts are contributing funds towards a "NHS bank", which will be a key development in ensuring that the whole of the NHS achieves financial balance in 2006-07. The combined effect of these changes will not be finalised until further information is known, but for South Worcestershire could reach £13 million."

As the cuts were announced, members of the county's three PCTs were backing plans to merge into a single trust representing the county, a move which has been strongly condemned by local authorities.

Wychavon District Council has urged the Department of Health not to disband the South Worcestershire PCT.

It argued that there was no business case to support change; that reorganisation would impact on services to patients and lower staff morale and the changes could put the hoped-for changes at Evesham Community Hospital at risk.

Councillor Judy Pearce, executive board member for health at Wychavon, said: "Wychavon and the PCT have worked well together to achieve the development of the new hospital in Pershore.

"We recognise the difficult position the PCT finds itself in, as it would have to make savings even if it did not merge with other authorities.

"But we are disappointed the PCT board feels unable to fight for continuing its local delivery of essential primary health services."

Cllr Malcolm Meikle, leader of the council's health scrutiny team, added: "South Worcestershire PCT has been accessible for the residents to question their decisions at locally-held board meetings. Wychavon's residents will lose this if the PCT is county-wide and we will lose the local knowledge that has been built up by the PCT during the last four years. At Wychavon we will continue to fight for the best possible health services for our residents."