Staff morale and patient services have been cited as potential casualties of a massive reorganisation of borough healthcare this week.

Merton, Sutton and Wandsworth Health Authority has formally dissolved with many of its functions, including powers over planning, commissioning and delivering services, transferred to the newly created Sutton and Merton Primary Care Trust and Wandsworth Primary Care Trust.

Wandsworth PCT is providing a range of support services for Merton and the health authority, including financial and major capital development services.

Watchdog Merton and Sutton Community Health Council (CHC) and MP Paul Burstow, Liberal Democrat social services spokesman, raised concerns about the structural revolution that became a reality this week. But the boss of Merton and Sutton PCT has said it is business as usual for patients.

Chief executive Ian Ayres said the full and, in his opinion, beneficial impact of the new system would be felt over the next two years.

He added that all affected employees had had their jobs secured within the NHS for one year, but after that they will be made redundant if no position can be secured for them.

The PCT has taken over the commissioning of, among others, acute hospital, mental health and learning disability services and 55 per cent of the budget from the now defunct Merton Sutton and Wandsworth (MSW) Health Authority in the two boroughs.

It has also subsumed the Sutton Primary Care Group, the South West London Community NHS Trust and a number of other bodies in taking over the provision of primary and community health care.

At the same time, a South West London Health Authority has been set up to oversee the region's PCTs and carry out the residual services previously carried out by MSW and similar bodies in Croydon, Kingston and Richmond.

CHC chief officer Nigel Spalding was broadly supportive, but was concerned about the apparent lack of resources to deliver improvements.

He said: "We will be monitoring the progress of the organisational changes to ensure there are no adverse effects on services to patients."

In a bid to ease fears about the impact on staff and patients, he added: "It's an organisational change rather than a service change. But in the longer-term the benefits are twofold. It means planning for health services locally will involve more GPs and district nurses. This will give us a more local focus and we might get better value out of our NHS."

He also said the PCT's internal structure would be led by its executive committee and dominated by professionals rather than managers.