VIRGINIA Bottomley has called for fairer funding for the Phyllis Tuckwell Hospice as it was revealed it was the former Conservative government had abolished guaranteed the hospice funding levels which she had set up.

As a former Health Secretary, the SW Surrey MP had established "ring-fenced" funds - money which health authorities had to spend on their local hospices.

Mrs Bottomley's successor Stephen Dorrell abolished the ring-fenced funds in 1996, leaving funding up to the discretion of health authorities.

Although health chiefs say the same level of funding has been kept up, Mrs Bottomley and the Phyllis Tuckwell general manager David Kinnear say the hospice needs more.

Mrs Bottomley wants either North and Mid Hampshire Health Authority to start contributing - between a fifth and a third of hospice patients are from that area - or for West Surrey Health Authority to increase its annual grant.

The hospice, which gives free care to people with terminal illnesses like AIDS and cancer, receives 17 per cent of its income from West Surrey Health Authority - the average national figure of health authority support is about 30 per cent. The rest comes from fundraising events and donations.

Mrs Bottomley has written to health minister Jacqui Smith asking her to "arbitrate" between the two health authorities to secure a result.

"When a third of its patients come from Hampshire it's only fair for Hampshire to pay their way," said Mrs Bottomley, who added she "dramatically increased" hospice funding as health secretary, as well as setting up the ring-fenced funds.

At the crux of the matter is a health authority shake-up in the 1990s. The former West Surrey and North East Hampshire Health Authority, which funded the hospice, was split in two, creating West Surrey and North and Mid Hants health authorities. West Surrey agreed to keep up the previous proportion of funding.

West Surrey's director of finance Peter Reeves said although his health authority's contribution has stayed about the same, it hasn't kept up with inflation because nurses' wages rise faster than inflation and the health authority's grant from the government does not allow for this.

Mr Reeves, who is also a director and trustee of the hospice and lives in Wrecclesham, added that the health authority grant represents a smaller portion of the hospice's annual income because the hospice raises far more through fund-raising than it did.

Asked if he felt North and Mid Hampshire should increase its contribution, Mr Reeves said: "From the point of view that 20 to 25 per cent of its patients come from their area, there is a case."

Hospice general manager David Kinnear said that when the original funding was agreed the hospice only took a "smattering" of Hampshire patients, but now he estimates the figure is more like 30 per cent.

"I think the North and Mid Hampshire Health Authority should look carefully at the grant that they don't give us as it would help everyone."

The hospice turned in a £257,000 deficit last year and David Kinnear said that if the level of health authority funding does not increase over a period of years, the hospice could be forced to treat fewer patients.