HEALTH services in south Worcestershire could lose out on as much as £13m due to a change in the way the Government allocates funds.

The Department Of Health has announced changes in the way it distributes cash to primary care trusts to support the system of payment by results - where the PCTs pay money to acute hospital trusts depending on how much work they carry out.

As a result of this, South Worcestershire Primary Care Trust will see a reduction in funds of £3.7m from April 1.

In addition, all primary care trusts are having to contribute funds towards a national NHS 'bank' to ensure the whole of the NHS achieves financial balance in 2006/07.

The combined effect of these changes could see South Worcestershire PCT losing £13m of its £287m budget - but health chiefs are still waiting for the figures to be finalised.

Coun Malcolm Meikle, health scrutiny team leader at Wychavon District Council, said: "South Worcestershire PCT is struggling to find the £1.8m it will need if there is a merger of the three PCTs in the county. Where is this further saving going to be made? There's got to be cuts. It is scandalous."

Alex Stewart-Cleary, chairman of Worcestershire Patient and Public Involvement Forum, was equally shocked.

"I am very concerned - it could see a negative impact on waiting times," he added.

Paul Bates, acting chief executive of South Worcestershire PCT, said: "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."