Mid Staffordshire Foundation Trust could lose all its acute services unless radical action is taken to address clinical and financial problems, a leading health policy expert has warned its management.

King’s Fund senior fellow in leadership development and health policy Nigel Edwards was invited by the trust, Staffordshire primary care trust cluster and local clinical commissioning groups to chair a workshop on the future viability of the trust.

The trust’s current plan leaves it with an annual deficit of £11m in 2014-15, despite plans to reduce beds by 40 per cent and shed a fifth of its staff over the next four years.

However, the group concluded extra money would not solve the problem as the shortage of consultant and medical grade staff and low levels of complex activity likely to be carried out at the trust would mean some services were clinically unviable.

The panel recommended consideration be given to closing the trust’s smaller Cannock Hospital. It questioned whether Stafford Hospital’s critical care unit would be “cost effective or clinically viable” if the trust ceased to provide emergency surgery and major elective surgery.

In his report on the event, published by the trust last week, Mr Edwards warned: “A failure to address the clinical and financial problems facing the trust could lead to the complete removal of all acute inpatient services with only outpatient and diagnostic services remaining and all other work being relocated.”

He said there was a case for “organisational alliances with another large trust” which could possibly lead to a merger and warned it was possible the options endorsed by the panel were “not sufficiently radical” to close the funding gap.

Vascular services are due to transfer to University Hospital North Staffordshire this month in a network that will also include Mid Cheshire Hospitals Foundation Trust.

Specialist work such as cancer surgery, primary angioplasty, major trauma and highly specialist care for premature babies has already been centralised, mainly at UHNS.

The workshop bought together senior representatives of surrounding trusts, clinicians from Mid Staffordshire, clinical commissioning group leaders, local politicians, patient representatives, representatives of the royal colleges, and the associate nurse and medical directors from the Midlands and East Strategic Health Authority.

They concluded the trust should retain a consultant-led maternity service for the time being and a reduced 24-hour service at accident and emergency. This would include full A&E services, excluding major trauma, stroke and cardiac arrest patients, during the busy day and evening and a minor injuries, GP out of hours and GP referral service overnight.

The emergency department has been closed overnight since December. At a meeting last week the board approved plans to reopen the department 24 hours a day from June onwards providing staffing levels can be maintained at required levels while the PCT cluster is due to launch a consultation on its future in May.