MID Essex Hospitals Trust has been referred to government ministers after it failed to break even or put in sufficient plans to balance the books.
The Audit Commission made the move after reviewing the financial health of nearly 100 trusts across the country and found that 19, including the authority which oversees Broomfield, St Peter's and two Braintree hospitals, had deep-rooted problems that warranted bringing them to the attention of ministers.
But Paul Forden, CEO of the trust, has reassured the public that services are not at risk.
"Most of the deficit is caused for structural reasons. The hospital is unique in that it's partly PFI and partly an old estate, and the way that the NHS finances work creates an unusual financial challenge," he said.
"We're probably the only trust with these challenges. It's not because we are inefficient. External reviews have found the standard of clinical care is very high. The problem here is because of the way our capital is structured."
Although the Chronicle has been unable to view the most recent 2013/14 audit letter, as it is has not yet been returned to the Audit Commission by the Trust for publication, it was forecast in the 2012/13 report that there would be a deficit of £19.6 million this financial year, and £15.1 million in 2014/15, which Mr Forden estimates has grown to about £18 million.
This was despite the trust achieving 96 per cent of its savings target in 2012/13, or £13.2 million out of £15.4 million, with "estate rationalisation" contributing substantially to this, with the trust selling assets with a net value of more than £10 million.
Explaining the decision to refer struggling trusts to government, Marcine Waterman, controller of audit at the commission, said: "This year auditors are reporting concerns about the financial resilience of a third of NHS trusts compared with a quarter last year.
"This level of reporting is worrying and reflects the increasing risks to the financial sustainability of individual NHS trusts, as they continue to face sizeable financial pressures due to a rising demand for services and the necessary focus on quality of care, whilst balancing the need for continued cost savings."
The news comes three years after the Chronicle revealed that Broomfield Hospital was struggling to meet repayments on the Private Finance Initiative which funded its new £148 million wing. The new wing was initially thought to give the trust an asset worth £161 million, but a valuation carried out on the building when it was handed over to the trust in August 2010 resulted in it being reduced by £32 million – an amount less than the loan repayment costs.
GP Dr John Cormack, of Greenwood Surgery in South Woodham Ferrers, said: "I think the trust have a particular problem because of the ginormous PFI debt it has to service which has been a huge millstone around its neck," said Dr Cormack, who has been outspoken on the issues of cuts to the health service for many years.
"But the whole area is in a complete mess and it's mainly down to the fact that the budget for Mid Essex is way below what it should be. It seems to be a lottery, and a lottery that mid-Essex always loses.
"I have noticed that GP referrals are getting bounced back more and more often but we can't do any more in-house than we are doing which makes life difficult."
However Mr Forden, who was given the top job in September last year, insists patients will not notice a drop in the standards of primary care and he remains "absolutely positive" they will overcome financial challenges.
He added: "I think we deliver excellent patient care and whilst I have to balance the books I won't do it by cutting safety, or quality and we have the support of the NHS to do that.
"This is not a new problem, it has been here for three or four years and each year we're managing it."
Dr Tom Nutt, chief executive of Healthwatch Essex, which replaced Patient LINK groups following the NHS shake-up last year, said: "We're aware that there are financial concerns around Mid Essex hospitals and it's important that this does not affect the quality of care that they are providing for local people.
"Healthwatch Essex is working closely with Mid Essex Hospital Trust to make sure that patient voice and lived experience is at the heart of the decisions they are making. At the end of the day, good care should cost less, as it means people receive the right kind of care in the right setting."
