Why is a successful North-East hospital trust talking about shedding 700 staff? Health Editor Barry Nelson considers the changes about to sweep across the NHS.

Anyone paying attention to Government health policy in recent years can hardly fail to notice a recurrent theme.

Ministers want to see more and more people treated closer to home by primary care staff, reducing the burden on very expensive hospitals.

Of course, seriously ill people will continue to need well-equipped, increasingly sophisticated hospitals but experts have told the Government that the way forward is to build up the primary care sector at the expense of the acute sector.

Bosses at County Durham and Darlington Acute Hospitals NHS Trust put the cat among the pigeons when they revealed that up to 700 jobs could go over the next three years.

Trade unionists and MPs united in expressing their concerns.

But former Health Secretary Alan Milburn, who is responsible for much of the NHS we see today, put his finger on the problem in an interview with this newspaper.

Mr Milburn pointed out that more NHS services are being provided at a local level in the community, rather than in hospitals. While hospital staff had done a fantastic job in slashing waiting lists, the backlog of patients for treatment had largely been eliminated, he said.

Symbolically, he opened a new-style health centre in his Darlington constituency which will provide a range of facilities for patients that would have been undreamt of only a few years ago.

"More services are being provided in the community. That is what people want and that has an impact on hospital services," the MP said.

Apart from the shift of investment from high-tech hospitals to low-tech but highly effective health centres, major changes in the way the NHS works are coming in over the next few years.

From January, patients will be able to choose from at least four hospitals to have a routine, non-urgent operation. With more private clinics offering operations, this will increase competition for NHS hospitals. Another important change is payment by results. The system is designed to allow NHS funds to follow the patient and reward efficiency.

But some doctors and health managers have warned that this could undermine some hospitals as private centres mop up the easiest, most straightforward cases, leaving the more difficult cases for the NHS.

Under payment by results, hospitals would be paid for every patient treatment rather than given a lump sum based on past activities.

If the move into primary care continues this could dramatically reduce hospital income.

Despite the warnings, the Government is pushing ahead with reforms. Only time will tell what effect they will have on the NHS.