A man who says he is passionate about the NHS is now in charge of much of the region's health service. Health Editor Barry Nelson met Peter Carr, the man who will shortly head up the new North East Strategic Health Authority

Former diplomat Peter Carr will need all his old skills over the coming months as the latest changes in the North-East NHS start to be implemented. The first major development will be the creation of a large single regional health authority extending from the Scottish border in the north down to Loftus in the south.

In October, new enlarged primary care trusts spring into life across the country, although in the North-East the only major change is the creation of a single large County Durham PCT from five smaller bodies.

Yesterday, the two old regional health authorities - Northumberland, Tyne and Wear and County Durham and Tees Valley - met for the last time before the handover.

This change will take place on July 1 and means that for the second time in a decade the centre of power in the region's NHS moves back to Newcastle after a few years shared with a body based in Stockton-on-Tees.

Regardless of the changed boundaries, the new NHS will be expected to deliver improved services to patients with fewer employees, an apparently daunting task.

Mr Carr, a former diplomat in Washington DC who went on to carve out a distinguished career in business, has already stamped his authority on his new, extended fiefdom.

Within the first few weeks of the announcement by the Department of Health, Mr Carr called together all the chairmen and chief executives of all the trusts in the two regions.

His message to them is an uncompromising one. The NHS has to change and evolve to keep pace with the legitimate demands of patients in an increasingly consumer-led society.

The other plank to his policy is to strictly enforce the orders from the centre to ensure that the books balance at the end of this financial year.

After all, the reason for the most recent NHS shake-up is to reduce bureaucracy and red tape and save at least £14m on managerial and administrative costs across the North-East.

Comparing the financial situation of the Newcastle-based SHA with the Stockton-based SHA does not make comfortable reading for those who have worked in a managerial position in the southern half of the new authority.

While the hospital and primary care trusts within the Newcastle-based SHA - including the sprawling three-site Newcastle Hospitals Trust - have always kept within spending limits, the situation in the Stockton-based SHA has deteriorated in recent years.

The habit of bailing out overspending hospital trusts in offering 'brokerage' - funds held in the region - suddenly came to a full stop when the Government ordered that all trusts live within their means before the end of this financial year. This led to a spending clampdown which disproportionately affected the County Durham and Tees Valley area.

The largest historic debt was accumulated by the South Tees Hospitals NHS Trust, which has slashed £30m from its budget last year and is aiming to clear an accumulated deficit of 21m by March 2007. In making those savings 237 jobs were lost at the Teesside trust.

Bosses at North Tees and Hartlepool NHS Trust also had to introduce sweeping cuts costing 90 jobs and are aiming to get a historic debt of £13.5m paid off by the same time.

Several PCTs in the southern half of the new SHA also finished in the red and more cuts will have to be made this year to claw that money back.

To meet the financial challenge, the management team at the Newcastle SHA was drafted in to help colleagues further south. It was no easy task, says Mr Carr, who was grateful for the assistance of his chief executive David Flory, who is now helping the Department of Health rein in budgetary excesses across England.

"Over the last seven months over-spending of well over £50m in the other health authority has been managed down. It was ferociously difficult to get down to that level but why are those overspends there anyway?"

Mr Carr does not hide his pride in the efficiency and financial probity of organisations within his 'old' SHA area.

"The ones that are effective in managing their budge are pretty good at delivery as well. Northumberland, Tyne and Wear SHA has been rated as one of the best in the country."

His view is that the NHS bodies which breached their budgets are also those which under performed in delivering patient services.

Financial performance aside, the new chairman also wants to see a more collaborative spirit in the old County Durham and Tees Valley SHA.

In the northern area a lot of commissioning and planning of health services are done collaboratively across PCTs. Mr Carr does not see that degree of co-operation in the other authority area.

"One of the big differences between this HA and the other HA is in style. If you were talk to any of the chairs up here you will get broadly the same view on the way ahead. We have had a collegiate approach, a joint vision of what we were going to do. That isn't there in the other authority."

Mr Carr is blunt about the fact that jobs have gone and will continue to go in the region's NHS in the months ahead. "We have no choice. You can't save 15 per cent unless you look at staff. It is brutally inevitable that some jobs are at risk."

The new chairman-elect has asked all the region's PCTs to come back in a week or so and tell him how they can meet the targets on cost savings. However, PCTs have been told that any cuts should not adversely affect services to patients.

"They have to deliver the same level of services but it must have no impact on those services," says Mr Carr.

Despite the gloomy headlines about job losses in the NHS, Mr Carr remains resolutely upbeat about the recent achievements of the Health Service and what remains to be done.

"It is a different world in the NHS. The speed at which services are delivered has changed. Attitudes towards patients has changed," says Mr Carr, who says local MPs no longer receive a sackful of letters complaining about long waits for operations.

The new chairman believes that more of us will be treated at well-equipped 'super-surgeries' like the new Grindon Primary Care Centre in Sunderland rather than in hospital.

He also believes the move towards more Foundation Trusts will forge closer links between hospitals and their local communities.

While he faces a tough job, Peter Carr believes he has a remarkable organisation and some remarkable people on his side.

"The NHS is the last of the big, nationalised industries. It has to adapt and change. But some of the brightest and most dedicated people work in the NHS. The public service ethos is very strong."