A hospice in the Black Country will miss its £1 million fundraising target this year by almost half due to a slump in donations, it emerged today.

Compton Hospice in Wolverhampton had hoped to raise the cash to help fund its £3.5m redevelopment, but has now conceded it will have to plunder its reserves by almost £500,000.

Head of fundraising Sue Chance warned today: “We are being hit in all directions. This year we will just about scrape by. We don’t want to panic people.

“We are not going to close down but should this continue for the next two or three years then we would be in a very dire situation indeed.

“We rely on the good nature and generosity of the public and we need them to support us.

“We launched the £1m appeal but we will be lucky to raise £500,000 this year, half of what we wanted to get.

“The development is not at risk but using our reserves means we don’t have that same amount of back up for the future.”

Compton Hospice spends around £6.2m providing specialist end-of-life care to people with a terminal illness from across Staffordshire and the Black Country.

In March 2009 it received £180,000 in donations from companies but by March 2010, this plummeted to just £64,000 and is expected to be around £80,000 by the end of this month.

The recession and continuing hard times have been blamed for the fall in support. The hospice has also seen general donations fall by £31,000 and memoriam donations drop by £17,000.

The fundraising campaign was launched to help bankroll a £3.5m refurbishment of patient facilities, due to be completed in May. Other funding has come from from sources including government grants.

Eighteen single, en-suite patient rooms are being built at the Compton Road West site, as well as improved day care facilities and better consulting and therapy areas for a range of treatments including physiotherapy.

Patients at the hospice were transferred to the Nuffield Hospital, in Tettenhall, at the start of August last year to allow the large-scale revamp to begin.