£2.5 million of services are being slashed at Epsom and St Helier hospitals after the NHS trust that runs them failed to claw back money it claimed was owed.

Epsom and St Helier NHS Trust this week broke the news it will receive only £850,000 of £2.15million it hoped to recover from East Elmbridge and Mid Surrey Primary Care Trust.

The wrangle over the disputed cash had been going on for at least two years and was finally brought to a conclusion by NHS arbitrators.

The trust's 2003 budget is based on the assumption the £2.15million would be found. The outcome of the arbitration leaves a £1.269million shortfall, coupled with a similar figure from the previous year, which will also have to be made up in 2003/4.

The deficit means provision will be affected at the hospitals and some services currently available on both sites will be discontinued at one.

Trust chiefs will now have to make quick decisions on where to make the savings and have told the Guardian that St Helier was more likely to have services cut than Epsom Hospital.

According to managers, these will be services which are not cost effective and are under-used, such as out- of-hours operations, which are available at both hospitals although there is not a large uptake at either.

Trust chief executive John de Braux said: "The sort of services we are talking about are those where we think the volumes are not very high, but use significant resources and can be provided just as well on one site as the other."

Sutton MP Paul Burstow said: "We will have to look very carefully at what sort of services will be affected and what cuts they make.

"If they have a significant impact there will need to be some consultation.

"This is more than trimming back on paper clips and is clearly going to have a direct impact on patients."

The MP also warned the trust could lose a star in its NHS ratings because of financial situation.

Mr de Braux promised no jobs would be lost and that the budget shortfall will not affect the implementation of the clinical services strategy.

The strategy aims to have brought about radical changes in local NHS delivery by 2010 and is reliant on massive new investment.

May 29, 2003 11:00