A hospital trust's deficit could top £3 million if cost-cutting action fails, it was revealed today.

The Princess Royal Hospital in Haywards Heath does not have enough money to pay for the increasing number of patients it is treating, despite attempts to save money.

Mid Sussex NHS Trust board was told at its meeting today that the trust could be in the red for the next three years. Chris Williams, director of finance, reported to the board that the trust was £1.7 million in the red.

He predicted that the deficit would climb to between £2.6 million and £3 million in the next year. The board members were warned that the funding problem could be worse but Mr Williams said a three-year recovery plan was being drafted to stave off the crisis.

Mr Williams said: "We've never been in this sort of trouble before, but you cannot keep handing nurses and doctors awards of up to four per cent and funding at 2.5 per cent while the rest is supposed to come from efficiency savings. Mr Williams said traditional money-saving measures such as closing wards could not be used now.

He said: "There's no easy answer given the pressures on emergency beds. One cannot turn patients away and the more you get increasing patients, the more you need to keep beds open. We have to look at things which take a lot longer to implement to try to bring the spend back into balance."

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