Published: 15/07/2004, Volume II4, No. 5914 Page 7

Serious financial problems at a flagship mental health and social care trust have led to warnings from auditors that the organisation might have to face a rarely used review to investigate its stability.

Manchester Mental Health and Social Care trust was one of the flagship bodies set up in 2001 to bring together mental health and social care.

But at a board meeting last week, acting chief executive Laura Roberts said high levels of demand, plus historic debts of£6.3m and commitments on setting up new services were placing serious pressures on the trust. The problems have also raised questions about the future of a unified service.

Trust auditor PricewaterhouseCoopers is worried that financial problems could escalate, requiring a public interest report on the trust's finances, in effect questioning the organisation's financial stability.

Only two of these reports have been made on the NHS in recent years, at West Yorkshire Metropolitan Ambulance Service trust, and Avon, Gloucestershire and Wiltshire strategic health authority.

At the meeting, Ms Roberts put forward a£2.7m cuts package that would include a freeze on some posts, renegotiation of service agreements and improved management of supported accommodation costs, which she said had spiralled to£2m a year after moving from local authority control to the care trust.

The trust is lobbying for extra funds from central government and Ms Roberts hopes that ongoing research will recommend that the city needs the same levels of funding for mental healthcare as inner London.

The trust is also looking at ways to save a further£2.7m, but has committed an extra£1m to ward staffing following concerns raised by staff, patients and the Mental Health Act Commission.

The MHAC has placed the trust on its 'red list'of organisations causing serious concern. After a visit to the trust's central site at Manchester Royal Infirmary in April, commissioners described Nelson Ward as being in crisis, with staff feeling 'debilitated and burnt out'.

They claimed that patients and staff faced physical and racial abuse on a daily basis.

The commissioners consider that problems on this ward 'must be immediately resolved to avoid a potentially catastrophic situation'.

The trust's Unison representative Karen Reissmann, who is a community psychiatric nurse, says the government must inject an extra£6m a year to reflect the urgent needs of Manchester, which are on a par with those of inner London.

Ms Roberts said: 'We have historic pressures, high demand and the triple whammy of a commitment to setting up assertive outreach, early intervention and crisis resolution teams which will cost£850,000 this year, rising to£3.3m next year. But what we are doing is not about cutting services.'

Asked if she thought the problems would spell the end of unified mental health and social care, she said that Manchester was unique in bringing together three care trusts, one community trust and a local authority.

'That question is still hanging.

But to an extent its irrelevant - what's important is that we get the delivery of services right.'