Published: 31/10/2002, Volume II2, No. 5829 Page 7

Southampton University Hospitals trust says threats that the trust would go bust unless it tackled its financial problems represented a 'hypothetical' scenario.

A staff newsletter sent out last month said: 'Preventing the trust from becoming financially nonviable and unable to pay our way is down to all of us and some firm and serious action that will involve curtailing services.'

Chief executive David Moss went on to comment: 'This is an extremely serious situation. We have to hit a£20m savings target - in line with all the other health providers in this area - and we are not currently making enough inroads into that figure.'

'I can only stress the seriousness of our position and tell you that this cannot go on.'

The newsletter warned that the trust had run up a£5m deficit in the first four months of the financial year and ordered a targeted reduction in manpower levels, no new management appointments, very strict controls on consultant appointments and further reductions in the use of bank and agency staff.

Local newspaper the Daily Echo said the 'perilous' state of the service meant that staff were in danger of not being paid in the new year.

This week a spokesperson for the trust said that Mr Moss had been describing a 'hypothetical' scenario, in order to 'drive the point home' to staff. She said the financial situation - which reflected difficulties across the health economy - had 'slightly' improved this month.