CASH strapped Kennet and North Wiltshire Primary Care Trust is to receive increased funding from the Government.

The funding allocations, announced by Health Secretary John Reid, relate to the years 2006/7 when it will receive an extra £17.6million and 2007/8 when it will receive an extra £20.6million but the trust has warned that it still faces having to make savings of around £10million in 2005/6.

In this financial year the trust is predicting an overspend of £8.8million on its budget of £182million but is hoping to reduce the amount by the end of March.

West Wiltshire Primary Care Trust, which is predicting an overspend this year of around £2.3million, will also receive increased funding in 2006 and 2007.

Both trusts are run by joint chief executive Carol Clarke who joined last October.

A review of all health services and community hospitals across both trusts is under way and proposals for change are expected to be announced in the next few months.

Financial troubleshooter Derek Harvey, brought in last summer to sort out the finances at both trusts, welcomed the increased funding.

"For the first time the funding properly recognises health needs associated with rural deprivation, not just the problems of inner cities," he said.

"The extra resource reflects some of the pressures on the local NHS but it remains important for us to live within our means."

Sharon Charity, Labour's Prospective Parliamentary Candidate for Devizes, said the increased funding was a "crystal clear example" of Labour's commitment to improving public services.

But Devizes MP Michael Ancram said: "The allocations still leave Kennet and North Wiltshire PCT short of the resources they need.

"The funding has historically been unfair and this does not rectify the unfairness.

"I will continue to press Government to understand the very real needs of PCTs in large rural areas."