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The Isle of Wight Council has successfully secured £50,000 from the government to help develop a bid for up to £500,000.
The Sustainability and Transformation Plan (STP) proposes to integrate services across the Isle of Wight and Hampshire, with Islanders having to travel to the mainland for many health services.
The Plans sets how Hampshire and the Isle of Wight health bosses are actively forming an alliance to work together in the future to rationalise health provision across the area.
The proposal was rejected by the Isle of Wight Executive (Island Independent) in December 2016.