HOSPITAL budgets in Burnley have plunged £600,000 into the red after only three months of the new financial year, health trust directors have been told.

Departments overspent by more than a quarter of a million pounds last month alone -- forcing an immediate freeze on all improvement plans and threatening the trust's drive to slash waiting lists.

Now, managers have been put under the cosh of financial restraint -- with finance director David Meakin warning there is no money in the kitty to bail out the overspenders.

In a report to Wednesday 's meeting of the trust board, Mr Meakin says all directorates have been ordered to get back on budget. "It goes without saying that directorates have a corporate responsibility to live within their resources.

"In view of the seriousness of the financial position, all directorates will now be asked to produce expenditure projections to the year end with proposals for recovery."

The cash crisis contrasts sharply with the position last year when the Trust was widely congratulated for meeting all its financial targets -- resulting in directors rewarding all staff with an extra day's holiday for their efforts.

Mr Meakin says the size of last month's £255,000 deficit was unprecedented, with acute services accounting for 60 per cent of the overspend.

He adds: "As a result of the current financial position no further developments can, therefore, be considered until control is restored."

He said at this stage the Trust was not in a position to assist individual directorates from its reserves, adding: "It is hoped that the Trust's drive to reduce waiting lists can at least be maintained, but even these targets have little margin for manoeuvre."

Mr Meakin reports that inpatient and daycase waiting list numbers were encouragingly reducing, but the prevailing financial pressures were a real concern.

More complex surgery such as hip revisions, more expensive pain relief methods and other high-cost patient treatment had contributed to the pressure.

Nursing pay in the surgical division was continuing to overspend because extra nurses, due to boost vital services from September, had to be recruited early to ensure they were in place on time.

The use of high-cost agency nurses in the medical division was in some part linked to sickness absence, but the position was being reviewed to cut costs, says Mr Meakin.

Chemotherapy drug spending was higher than budget but further resources may be provided for the service. Clinical waste and transport insurance costs had also added to the position.

June was an unusually busy period for IT maintenance while pressures in the community and mental health directorates revolved around staffing to cope with service demands and cover for long-term sickness.

Mr Meakin describes the current level of overspending as unsustainable.