A single health authority covering south-east Hampshire and the Isle of Wight will come into being on 1 April, following the go-ahead for a merger of the existing authorities by junior health minister Gisela Stuart.

But Isle of Wight HA chief executive David Wastall told HSJ that concerns had been expressed during the consultation process that the Isle of Wight would lose extra funding that it currently receives from government.

He said: 'Our target allocation is lower than the actual allocation by 7 per cent, and there is a fear on the island that money will flow to Portsmouth.' He added that he hoped the new HA would bear this in mind when deciding on its financial priorities.

It has been agreed that the financial allocation for the new authority will be the same as the combined allocation for the two existing authorities, until at least 2004.

The new authority, to be known as Isle of Wight, Portsmouth and South East Hampshire, will replace the current Portsmouth & South East Hampshire HA and Isle of Wight HA.

Both HAs say they hope most staff will be transferred to the new HA or to the primary care trusts.

The working of the new HA will be reviewed by the regional office after a year's operation.

The chair of the new HA will be Peter Bingham, currently chair of Isle of Wight HA. The current Isle of Wight PCG will become a PCT on the same date, with Isle of Wight HA non-executive director Val Anderson becoming PCT chair.