HOSPITALS bosses may be forced into major job cuts after discovering an £11.7million funding black hole.

The East Lancashire Trust was already facing a spending cut of £11.6million after a reduction in its budget, to £255million.

But now it has discovered that it needs to find another £11.7million because of changes in the way it receives payments for services from the Government.

Around £4million of that cash is due to the Department of Health making changes to a "price list" for treatments, which was withdrawn in January and only re-issued on March 17.

Trust chairman Christine Kirk wrote an angry letter to NHS chief executive Sir Nigel Crisp, four days before he retired last month, saying the change was "unacceptable" and had "severely compromised" the trust's ability to plan for the coming year.

The news, which comes after authorities throughout the UK laid off thousands of workers, was today blamed on a "management shambles".

The announcement came from East Lancashire Hospitals NHS Trust's director of organisational development, Gary Graham, who said: "We take our responsibilities as a major employer very seriously and want to protect jobs locally whenever possible.

"However, if we don't do this alongside meeting our financial responsibilities there is a very real danger that, as in other parts of the NHS, we could be facing significant job losses here in East Lancashire.

"Whilst we can't guarantee there won't be any compulsory redundancies necessary to get us to a breakeven position, we are doing everything we can to avoid this situation."

The trust, which employs about 7,000 people, set out to spend £7.5million less this financial year but only managed to claw back £5.5million.

Now, for the coming financial year, it has pledged to spend £11.6million less, with £2.5million to come from the axing of 267 beds.

But it is still on course to spend a further £11.7 million above the cash it gets - meaning job losses may be needed to break-even by March 31 next year.

Trust finance director Stephen Brookfield admitted £3.7million of the £11.6million savings would be "a challenge" and the trust would need to seek bail out cash from Cumbria and Lancashire Strategic Health Authority for the further £11.7million.

Brian Gordon, deputy chairman of Blackburn with Darwen Council's health scrutiny committee said: "It is a management shambles. It is disgusting.

"They are never going to get £11.7million off the strategic health authority and I don't see how they are going to make the other £11.6million savings.

"They failed miserably in their attempt to save £7.5million and they have got a bigger task still."