North and East Hertfordshire trust is planning extensive changes to services to reach break-even.

The trust is also reviewing the affordability of a£500m hospital planned for Hatfield, before preparing an outline business case, but said the hospital would go ahead.

The trust must strip out a total of£66m in costs over four years' nearly 25 per cent of its annual income - to tackle its deficit, efficiency targets and demand management.

The trust, which was£22.5m in deficit at the end of 2005-06, will save money as staff transfer to the new unit and parts of the hospital can be taken out of service. But this is likely to be up to£5m less than the income it will lose.

The trust is consulting on service changes between its two main hospitals - the Lister and the Queen Elizabeth II in Welwyn Garden City. The first phase proposes concentrating children's emergency services at the Lister but with a rapid assessment unit at the QEII. Gynaecology and obstetrics will also be concentrated at the Lister. Changes would take effect from 2008.

The second phase of the changes would see all 'blue light' emergencies and inpatient surgery going to the Lister. Most elective and emergency care would be based at the QEII.