Health Minister Tony Ryall has written to five district health boards asking them to reduce the number of Primary Health Organisations in their areas.

Mr Ryall has told Northland, Auckland, Waitemata, Hutt Valley and Capital & Coast that consolidation is needed: a national total of 80 PHOs is far too many and he wants less than half that number.

He said benefits would include administration efficiencies, improved capacity for preventive health programmes, and better use of scarce leadership, skills and expertise.

Mr Ryall says it's part of a drive to cut bureaucracy and free resources for frontline services.

Radio New Zealand's health correspondent says Primary Health Organisations channel Government funding for healthcare to a wide range of community groups including GPs.

It was revealed in November that PHOs were sitting on cash and investments worth more than $115 million - money the Government said should be being spent on community health programmes.

Northland has six PHOs, Auckland five, Waitemata has six, Hutt Valley has five and Capital & Coast has seven.

They were set up in 2001 by the then-Labour Government.