GOVERNMENT plans for a major reorganisation of the health service in Oxfordshire threaten months of upheaval as it grapples with massive debts.

The Thames Valley Health Authority, now faced with presiding over job cuts as the size of its deficit grows weekly, is to be abolished. Instead it will form part of a giant new strategic NHS authority, which will also include Hampshire and the Isle of Wight.

The decision was announced by Health Secretary Patricia Hewitt following a meeting at Downing Street with NHS Trust chief executives from around the country. The Government revealed that the number of strategic health authorities nationally will be reduced from 28 to ten "to ensure the NHS is structurally able to deliver the next stage of health reforms".

But with the new strategic health authorities to be established in July, it leaves health managers in Oxfordshire facing the second major NHS shake-up in Oxfordshire in three years.

And it comes as the size of the NHS deficit facing the Thames Valley is estimated at being anything between £35m and £82m.

Government critics say the new NHS authorities bear a remarkable similarity to the regional offices of the NHS abolished in 2001 after another costly reorganisation exercise.

Miss Hewitt made clear that equally important changes are imminent, with a planned reorganisation of primary care trusts and ambulance trusts to be announced shortly.

Mark Ladbrooke, chairman of Unison's Oxfordshire Health branch, said: "It could be some of the cuts that will be proposed over the next few weeks will be sharper as a result of this. We are told the reorganisation will result in savings of £9m in the Thames Valley. But I am in no doubt that this is going to cost money in the short term."

Spokesman for the Thames Valley Health Authority, Kevin McNamara, said that the authority welcomed Miss Hewitt's announcement.

He said: "We have been working to reduce the possibility of redundancies through vacancy freezes and natural wastage on management and admin posts. Significant savings will be made through a reduction in very senior posts and, where possible, alternative positions will be found for staff with the aim to keeping redundancies to an absolute minimum."

The authority is now hoping that the five primary care trusts in Oxfordshire, formed in 2002 to oversee community services like GPs and dentists, will be merged into one by October. The spokesman said a public consultation also showed support to create one ambulance trust covering Thames Valley and Hampshire, also expected to take place in July.

Meanwhile, Oxford Brookes School of Health and Social Care, which has trained hundreds of nurses, midwives and occupational therapists for local hospitals since being created in 1997, confirmed it is facing major financial worries.

A fall-off in money from the NHS means the school, one of the largest at the university, will have £1.2m less to spend a year by 2008. The school confirmed that 17 jobs are to go, mainly in teaching.