Mid Staffordshire Foundation Trust is to close nearly 40 per cent of its beds as part of a recovery plan designed to tackle its growing deficit.

A predicted 17 per cent reduction in activity over the next three years and changes to tariff payments means the trust is forecasting a deficit of £46.6m by 2014-15.

The strategy document, submitted to Monitor on 30 September, sets out plans to tackle this through annual efficiency savings of 6 per cent. This includes demand management and reducing length of stay from 4.6 to 3.3 days, enabling the closure of 165 beds. The workforce is expected to shrink by 20 per cent and the estate by 25 per cent.

However, despite this, the trust is still forecasting a £11.1m recurring deficit come 2014-15. Last month HSJ reported the trust could run out of cash by December unless it received a bail out after investing heavily in improving quality of services.  

According to the plan, the remaining deficit will be tackled through making better use of estate, for example leasing vacant buildings to primary care services, and winning back some of the 3 to 8 per cent market share lost due to the “Mid Staffs effect”.

Medical director Manjit Obhrai said: “The two areas of excellence where [the trust] works well are rheumatology and orthopaedics. We are looking at whether we can make [the market share] up in these areas.”

He admitted a third option mentioned in the document of a “tariff plus” arrangement, where commissioners paid extra for the services, was “unlikely” on anything but a short term basis.

Under the plan the trust will stop providing surgery for paediatric emergencies and may no longer provide emergency surgery 24 hours a day. Only the simpler vascular and upper gastro intestinal services will be provided on site. More complex cases transferred to University Hospital of North Staffordshire, with which the trust has a “surgical alliance”.

The trust expects to lose 541 posts through natural wastage and staff transferring to services in the community or to other trusts along with the transfer of work.

Director of finance Darren Cattell said: “Mid Staffordshire NHS Foundation Trust has lost between 3 and 8 per cent market share of elective surgical services over the period 2007-08 to date. The majority of this loss occurs in the period between mid 2008 through to mid 2010 and is very much specialty specific.

He added: “The trust continues to work with the SHA, the Staffordshire cluster, Monitor and other stakeholders to finalise the arrangements to enable the trust to continue to make its normal payments to a range of parties such as suppliers from December 2011 onwards.

“This is the point the trust may have run out of cash under current circumstances. All parties are extremely supportive to the position of the trust, and the trust expects to be able to announce the funding measures are in place before the end of October 2011 or soon after.”