Trust which runs Walsall Manor Hospital must save an extra £2.9m

Walsall Healthcare NHS Trust had set itself a target of overspending on its budget by £17.7m in 2015/2016 which chiefs referred to as a 'planned deficit'.

But just four months into the financial year bosses have already spent an extra £100,000.

They have blamed that on a number of reasons including overspending on nurses, as well as fines levied for missing targets relating to patients being referred for elective treatment on time.

But now NHS England has demanded that the trust reduce its deficit to £14.8m for the year.

Chief executive Richard Kirby indicated that the new figure would be very difficult to achieve and warned it would have severe consequences for services.

He said he had written to the Trust Development Authority to express his concerns.

Mr Kirby stated that it was not just Walsall facing the extra demands and that almost all of the trusts in the country had been asked to reduce their spending.

He said: "In response to the overall national financial position Monitor and the Trust Development Authority have issued targets to trusts to improve their financial position.

"For us this has resulted in a target deficit of £14.8m.

"We have been asked to submit a response to the TDA team setting out how we could deliver this improved position.

"The response sets out the pressure we are already facing to deliver our £17.7m planned deficit and the action that we have already considered to deliver this.

"Further reducing the deficit will pose risks to our continued operational improvement."

Mr Kirby said talks may be ongoing with the TDA for a matter of weeks concerning whether the trust will be made to meet the new target or not.

He added: "At this point as part of national push to make sure NHS lives within its means trusts have been given more financial targets on top of the ones originally set.

"There were a fair number of strong challenges getting to £17.7million, going beyond that will require extraordinary measures."

It emerged recently that more than £250 million was spent by health chiefs in 12 months – with the majority on staff wages, latest figures have revealed.

Expenditure on salaries for workers contributed to 66 per cent on the budget.