Bottomley replaces Mellor. . . internal market 'projects'. . . plea for £1bn extra. . . managers' performance pay frozen. . . HA merger row

The appointment of Virginia Bottomley as health minister is expected to herald a softer approach to promoting the NHS reforms. Formerly a junior environment minister, Mrs Bottomley replaces David Mellor, who has returned to the Home Office.

The Department of Health is to spend£1m on 'development projects' to test the internal market in nine districts and one region. It has denied speculation that the projects amount to pilot studies, which health secretary Kenneth Clarke has always insisted were unnecessary. But the move is seen as reflecting managers' concerns over implementing the internal market by April 1991.

Health authorities need£1bn extra cash next year just to stand still, and a further£590m to meet growing health needs, the National Association of Health Authorities has warned. It estimates that the NHS in England, Wales and Northern Ireland has been underfunded in the current financial year by£323m.

Senior managers, who lost their Whitley Council pay negotiating rights earlier this year, have had a 6.5 per cent salary increase imposed by the Department of Health. The rise is the same as that offered to all Whitley groups, but it has dashed hopes that higher levels of performance related pay would be offered to senior managers. Their PRP will remain at 1.5 to 4 per cent. General managers have had their levels increased to between 2 and 6 per cent.

Proposals to split Bloomsbury HA and merge each half with Islington and Parkside HAs have provoked immediate responses. HA chair Dr John Dunwoody and vice-chair Helene Hayman have questioned the proposal's timing, while local Labour MP Frank Dobson claimed the move was politically motivated.