A LEADING councillor said the modest allocations to new NHS commissioning groups next year will leave them with "an impossible financial challenge" to tackle historic debts of up to £75m.

Councillor John Blackie, leader of Richmondshire District Council said the 2.3 per cent increase given to the new GP-led Clinical Commissioning Groups - which take control of most NHS budgets next April - amounted to an effective spending cut.

With inflation currently running at 2.7 per cent and the new CCGs being told to set aside one per cent of their new budgets for contingencies, Coun Blackie said the increases amounted to a spending cut and would be totally inadequate to deal with North Yorkshire's financial debts.

"It does seem to be an impossible financial challenge to deal with that sort of deficit when all you are being given is funding that actually cuts the front line expenditure. I would be very concerned how the new GP commissioners are going to square the circle."

The councillor said people living in North Yorkshire were "fearful" of the long list of potential cuts being compiled by KPMG, the financial accounting firm called in by health bosses to try to make cuts.

Coun Blackie's own CCG, NHS Hambleton, Richmondshire and Whitby, will get an allocation of £169.3m next year compared with a notional allocation last year of £165.5m.

A spokesman for NHS North Yorkshire and York stressed that allocations to the new CCGs could not be directly compared with the funding provided to the old Primary Care Trust, which will be abolished in April.

Further north, Dr Stewart Findlay, chief clinical officer for the new Durham Dales, Easington and Sedgefield Clinical Commissioning Group, said: "It is a very complex picture at the moment. We have split into three CCGs in County Durham and we are trying to work out what resources are appropriate for the different areas."

Dr Findlay's CCG will get £398.3m next year compared with a notional £389.4m last year.