FINANCE: The trust, the largest in the country, has included a £70m cost reduction plan and £30m deficit without transitional funding in its budget for 2011-12.

The latest published finance meeting report said: “The main changes from last year’s service level agreement (SLA) included a £52.5m deficit in inflation and development, an SLA growth impact that yielded a £21m additional cost whilst SLA income was reduced by £7.6m.

“The reductions the trust faces are real as there is no opportunity to include growth through technology, population and activity increases in the CIP.”

The document, from the £900m turnover, trust added: “The negotiations with the strategic health authority and the sector on the 2011-12 SLA were discussed. Volume increases accepted by the commissioners amounted to £28m which will cost the trust £21.2m to provide.

“Volume reductions amount to £21m including a drop to 25 per cent of tariff for any readmissions within 28 days. The difficulty in avoiding over performance was discussed. Income is being moved from hospitals to the community, but the activity is not moving with it so the subsequent deficits are being held by acute hospitals.”

The trust’s turnaround chief executive Mark Davies, formerly NHS London’s head of provider development, started in the post last week.