Monitor has launched an investigation into the finances at County Durham and Darlington Foundation Trust after the acute trust predicted a deficit of £14.7m for this financial year.

The £479m-turnover organisation provides hospital and community services to a population of roughly 600,000 people.

The board of the trust has been aware of the size of the predicted deficit since the start of the year, when it signed off its annual plan.

Monitor’s regional director for the area Paul Chandler said: “We know the trust, like much of the NHS, is facing a serious financial challenge but we are going to help find out what more can be done to get a grip of the situation.

“Thousands of people across the region rely on the services this trust provides, so we will work quickly to determine what support the trust needs to help ensure the necessary improvements are made.”

The trust’s chief executive Sue Jacques said the trust planned to return to surplus in 2016-17.

In a statement she said: ”We have been working with Monitor for much of this year, so that they understand the financial challenges we face, the work we are doing to address them, and how we we can continue to improve our financial position without having a detrimental effect on the quality of patient care.

“2014-15 was the first time that County Durham and Darlington ended the year in deficit, having generated surpluses to reinvest in front line services every year since becoming a foundation trust.

”A key challenge is the cost of medical and nursing bank and agency. This has been a pressure for trusts nationally in meeting new recommended staffing levels, at a time when unplanned activity continues to increase.

”Steps we have taken include new in house bank arrangements and recruitment abroad, and these are already having an impact. The trust’s nurse agency costs are down from £1.33m in June to £635,000 in November. There is more to do, particularly in addressing the cost of medical agency staff.”