The government has finally agreed to provide £3.5m funding for the development of local HealthWatch organisations. However, concerns remain that the organisation is being “set up to fail” under current plans.

Members of local involvement networks, which are being replaced by HealthWatch, were furious to find out in the summer that there would be no funding to help with the transition.

Unlike LINks, local HealthWatch branches must be constituted as corporate bodies in order for local authorities to commission services from them, involving start up costs and legal advice.

Following concerns from LINks members and patients groups, the Department of Health has agreed it will provide £370,000 start-up funding for the 75 HealthWatch pathfinders to be spent by the end of 2011-12. Next year local authorities will receive an additional £3.2m to help with the transition from LINks to Healthwatch while the deadline for setting up local Heal;thWatch has been extended from October 2012 to April 2013.

Health secretary Andrew Lansley said local HealthWatch was a “vital” part of the government’s plan to give patients and the public a “stronger voice”.

Chair of the National Association of LINks Members Malcolm Alexander welcomed the extra funding. However, he said concerns remained about the lack of a ring fence for the £60m local HealthWatch budget which will be distributed by local authorities,

He also expressed concern about the impact of council funding on the independence of the HealthWatch branches that are supposed to scrutinise council social care services, as well as health.

Local HealthWatch wil be supported by HealthWatch England, which will be a committee of the Care Quality Commission. This has prompted concern about the organisation’s independence at a national level.

Jeremy Taylor, chief executive of the patients’ group National Voices, said: “The start up finding is a move in the right direction but it doesn’t necessarily address the issues about the workability of the HealthWatch model… it’s not enough to ensure an effective consumer champion.”

HealthWatch is a flagship policy which the government has promised will bring “real local democratic accountability and legitimacy” to the NHS “for the first time in 40 years”.

It will be the third time patient and public involvement has been reorganised in a decade.

The post of chair of HealthWatch England is due to be advertised in January. Under current arrangements the holder of the post will also have a seat on the CQC’s board.

Action Against Medical Accidents chief executive Peter Walshe predicted the DH would find it difficult to recruit a “good” candidate when there was still so much concern about the design of HealthWatch.

“The way it’s currently designed it could end up being a poisoned chalice. Unless they change that the government will be setting it up to fail.”