The foundation trust regulator Monitor has highlighted significant financial problems at Blackpool, Fylde and Wyre Hospitals Foundation Trust.

Monitor today said the organisation was in significant breach of the terms of authorisation as a foundation trust. Its main concerns are the organisation’s deficit, that it is falling behind on its cost improvement plans, and its governance and management.

In particular it said the trust had failure to meet its financial plan for the first quarter of 2010-11, had not ensured appropriate resources and governance arrangements were in place to deliver its annual plan for 2010-11, and had signed a contract which left the trust with an unacceptably high level of financial risk.

Monitor said it had decided not to use its formal intervention powers but would closely review Blackpool’s performance to check it was improving.

Monitor interim chief executive David Bennett said: “The focus is now on the future and taking the actions necessary to ensure the continued provision of high quality patient services from a secure financial platform.

“Monitor has considerable experience of working with foundation trusts with financial problems that have been successfully resolved.”

In a statement responding to the Monitor announcement, Blackpool chief executive Aidan Kehoe said: “We accept Monitor’s ruling and fully understand its implications. We are working very closely with Monitor and have action plans in place to return the trust to financial stability.

“We realise that the public sector faces very challenging cost improvement targets and our goal is to deliver financial improvements while at the same time improving the services to our patients by providing more efficient clinical pathways.”

He added: “The key to future success and sustainability lies in transforming services so that we remove unnecessary delays and duplication of services and taking waste out of the system. 

“We have a number of major developments underway at the moment with the building of a state of the art new surgical unit, a new women and children’s building, a new urgent care centre and an electronic patient record that will ensure a major improvement in the quality of service we can deliver to patients.

“These developments will also enable us to provide a better quality of service at a better cost in the future.”

Blackpool was authorised as a foundation trusts in December 2007 and has not previously been in breach of its authorisation.