Mental health trusts are being forced to subsidise other parts of the health economy, a report has warned.

Mental health trusts are being forced to subsidise other parts of the health economy, a report has warned.

The Sainsbury Centre for Mental Health found that although the vast majority of trusts responding to the survey broke even or recorded a small surplus, over a quarter experienced reductions in income over the past year.

Under Pressure: the finances of mental health trusts in 2006reports that unexpected upward pressure on costs had occurred in 40 per cent of trusts surveyed and most said money had been withdrawn from their funds to help a financial problem elsewhere in the local economy.

The average saving that trusts were expected to donate was equivalent to 3.5 per cent of total annual income, and 68 per cent of trusts expect to have to make savings throughout the 2006-07 financial year.

Special measures to maintain financial balance had to be made by 75 per cent of trusts. Of these, 59 per cent had to place controls on recruitment or the use of agency and bank staff and almost a quarter had to make reductions to the permanent closures of wards or other parts of the their service.

Trusts were also concerned that the introduction of payment by results in the acute sector was causing funds to be diverted away from mental health, as the tariff-based system is not yet underway in the sector.

Respondents commented that they did not expect payment by results to be introduced in mental health until 2009 at the earliest and feared that it would increase volatility in the mental health sector when it is.

There were also worries about lack of commitment to mental health by commissioners and commissioners' lack of understanding of the sector.

Alzheimer's Society chief executive Neil Hunt said: 'Services are already under funded. It is ridiculous that already-stretched budgets are being met with more cuts.

'Punishing good management by further depriving mental health services of much needed funds is unacceptable.'

www.scmh.org.uk