Health secretary Jeremy Hunt has backed plans to reconfigure hospital services in South Gloucestershire after they were referred to him by local councillors following a long-running row.

However, the Independent Reconfiguration Panel, which was commissioned to advise the health secretary, criticised the local NHS for a “marked lack of empathy” with the public.

The South Gloucestershire Clinical Commissioning Group was referred to the health secretary late last year by South Gloucestershire Council’s overview and scrutiny committee after reneging on a commitment by its predecessor primary care trust to build a new community hospital.

The primary care trust had pledged to open a new 68-bed hospital on the site of North Bristol Trust’s Frenchay Hospital in 2010 following local objections to both the closure of the site and the relocation of services to the trust’s new private finance initiative hospital at its Southmead site. The move is due to take place next month.

The CCG says services are not needed at the Frenchay site as there is sufficient capacity for outpatients and diagnostic services at nearby Cossham and Yate community hospitals.

Separately, the CCG plans to commission some rehabilitation beds but does not want to be tied into a fixed number.

The reconfiguration panel agreed with the CCG that it would not be an appropriate use of resources to continue with the community hospital proposal.

In a letter to overview and scrutiny committee chair councillor Ian Scott, Mr Hunt said he had accepted the reconfiguration panel’s advice “in full”.

The panel’s advice said it “entirely understands that residents of the area should feel exasperated by the years of delay, changes to the NHS organisation, pauses in developments and amendments to plans.

“The overall process to date has shown a marked lack of empathy for patients and the public who have a right to expect better.

“Nevertheless the panel recognises that circumstances change. While the provision of safe, high-quality care is always the first priority, achieving value for money and making the best use of available resources is now a key factor in planning and operating a modern NHS.”

The panel also said the CCG must work with the trust and the committee to assure the public that there would be sufficient capacity in local services to meet demand.