HEALTH managers struggling to cover a multi-million deficit in Oxfordshire's budget have been told that next year they will be given £14m less than they expected.

The Government has decided to get rid of the purchaser parity adjustment grant which gave extra money to primary care trusts (PCT) in expensive areas.

The Department of Health has described the end of the adjustment grant as a "rebalancing of resources" that aims to stop different prices being paid for the same operation.

A spokesman for the PCTs in Oxfordshire said they still expected an increase of nine per cent, equal to £58m, in funding for 2006-200 on top the expected £634m.

She added: "A reduction in the purchaser parity adjustment grant of £14m for the PCTs is something we are aware of and we are taking it into account in our budget setting for the next financial year.

"It will mean we will have less money with which to invest in and develop new services."

Detailed information about what services will and will not be paid for are to be released at the end of this month.

Oxford City PCT, the second biggest beneficiary of the adjustment grant, is set to lose the most a total of £9.6m next year. The Cherwell Vale and North East Oxfordshire partnership will miss out on about £4.8m, and South East Oxfordshire will lose £231,000. South West Oxfordshire PCT, which stretches from Burford to Didcot, is the only trust in the county to benefit, and will receive £357,000 more.

Tony Baldry, MP for Bicester and Banbury, described the end of the adjustment grant as crazy.

He said: "This means the new single Oxfordshire-wide PCT, which is to come into action in July, will have £14m less with which to purchase operations and services from the Oxford Radcliffe Hospitals Trust and other hospitals. It is all further pressure on the health service in Oxfordshire.

"One doesn't get any sense that anyone has got a grip on the situation. Sooner or later someone is going to have to explain how all this money is going to be saved. Until that happens it is very difficult for people to get an idea of the impact these reductions are going to have on spending and services.

"It seems to me totally crazy. It is just a further difficulty for Oxfordshire"

The county's health chiefs have tightened belts already this year, after they were told to make a ten per cent saving to deal with a £33m overspend.

Oxfordshire Mental Health Trust plans to close a number of inpatient beds and other services, while the South East and South West Oxfordshire PCTs say they will close four community hospitals, in Wantage, Abingdon, Wallingford and Henley.

Plans to close beds at the Churchill Hospital's chronic pain unit have been put on hold, but all the PCTs have cancelled routine treatments, such as those for hernias, varicose veins, and heart ablations.

GP referrals for hospital care are also screened, and will be rejected if they are considered unnecessary, or inappropriate.