Trafford Healthcare trust has launched a turnaround plan in a bid to avoid a £7m deficit next year.

The move follows sweeping changes in trust management and the appointment of Steve Benger as turnaround director, a role he formerly held at Newham University Hospital trust.

The Manchester trust, which is predicting a surplus for 2007-08, has just secured a loan from the Department of Health to clear historic debts of£3m. It was where the NHS was officially opened in 1948.

But managers say it is heading for a£7m deficit in 2008-09 unless significant changes are made.

Interim chief executive Steve Spoerry told HSJ the forecast deficit was down to a combination of income loss and increased costs.

That includes a predicted loss of£1.1m in income from Trafford primary care trust due to cutting unnecessary outpatient follow-up appointments and spending on intensive and coronary care units.

The plan, which was approved by NHS North West, includes shedding 210 posts, mainly through scrapping long-term vacant posts and reducing use of agency and bank staff. Other measures include closing two wards at Trafford General Hospital, mothballing two operating theatres, selling assets and leasing premises to other trusts.

An all-new management team will lead the efficiency drive.

All trust directors and half of the non-executive directors have changed over the past year and the trust hopes to announce a permanent chief executive in the coming weeks.

Mr Benger will lead a four-strong "turnaround programme management office", which will be in place for a year. The trust board has set up a subcommittee to monitor progress on the turnaround plan.

Mr Spoerry said one of the challenges for management was "to be visible to our own staff". For example, he is writing a blog about the trust's turnaround efforts.

"The trickiest thing for us to get right is to maintain our visibility and optimism and keep a handle on how we're doing in real time week on week. But I have every confidence we can do it."