Kettering General Hospital Foundation Trust has been found in significant breach of its authorisation by Monitor amid concerns about performance including a failure to hit the accident and emergency waiting times target over an 18-month period.

Monitor said the trust breached three authorisation conditions: duty to exercise its functions effectively, governance and healthcare targets.

The regulator has instructed the trust to implement an action plan to improve A&E performance and take “rapid action” to strengthen its financial plan, with a renewed focus on cost savings and cash management.

The trust is facing a cost improvement target of 5.5 per cent of its budget - £10.6m - but managed to deliver only 67 per cent of this amount in 2011-12.

Monitor has also required the trust to commission a review of its board governance by early December.

The trust breached the target to see 95 per cent of A&E patients within four hours over the six consecutive quarters up to quarter one of this financial year. However, the trust says it has now hit the target.

Monitor said the trust “has repeatedly made inaccurate forecasts of its return to compliance” on the A&E target. The regulator cited a 2011 review by the Department of Health emergency care intensive support team and a 2012 review by the College of Emergency Medicine which both raised serious concerns.

The latter report highlighted serious concerns regarding the trust’s governance framework, departmental audit programme, and staff education.

Monitor said the “trust did not take action with sufficient pace” following the reviews.

The regulator’s chief operating officer Stephen Hay said: “We have been tracking the trust’s performance for some time and are requiring action to be taken because it is not acceptable that the trust is persistently failing its A&E patients. We now expect the trust to focus on immediately and sustainably resolving this issue.

“We require the trust to scope out a review of its board’s governance and immediately improve its 2012-13 financial plan to deliver effective cost savings. As part of this the trust needs to get to grips with its cash flow.”

Monitor has said it will use its regulatory powers to take action if the board does not deliver the required improvements within the specified timescales.

Kettering chairman Steve Hone said: “Progress has been made on A&E and the good news is that over the last three months our performance has risen above 95 per cent and we have put a lot of work into developing more robust systems that enable us to maintain this.

“We have also been very active internally on working with our staff to bring about cost and efficiency improvements and new ways of bringing income into the trust which is starting to bear fruit.”