OVERSTRETCHED hospital services - depended on by Halesowen patients - could face collapse if critical underfunding is not addressed.

The stark warning comes from Dudley hospital group supremo Paula Clark, as she grapples with cuts of up to £18 million to balance the books next year – and the threat of even more budget slashing.

As Dudley Group NHS Foundation Trust chief executive Ms Clark has pleaded for Government help.

In an explosive letter to Dudley North Labour MP Ian Austin, whose constituency includes the area’s main Russell Hall Hospital, she said: “The scale of the financial challenge has reached unprecedented and unviable levels.”

The trust is not alone, with more than a third of providers – who account for 75 per cent of care – rejecting the Government’s proposed payments for 2015/16.

Eighty per cent of England’s hospitals are already in deficit, with the Dudley trust expecting to be £7 million in the red in the next financial year.

Ms Clark said even the 200 job cuts the trust is being forced to make is only half way towards the £16 to £18 million they need to find.

The proposals demand efficiency savings of 3.8 per cent, despite research, commissioned by the regulator responsible for setting prices, finding that between one and two per cent is the most that can be achieved.

“We do not believe that this trust can make that level of saving without affecting the services we provide,” said Ms Clark.

And with growing cost pressures coupled with “substantial” increases in referral rates and emergency admissions, she warned the trust will have to make savings of between six and 10 per cent next year to remain financially viable.

She wrote: “If these proposals go ahead, we expect this excessive efficiency requirement to destabilise our finances to the extent that we could not guarantee our ability to maintain quality or invest in improvements to patient care.”

Ms Clark said it was “critical” to current and future services that an efficiency factor of a maximum two per cent was set.

She also criticised the system of clawing back money from trusts to enable the NHS to balance budgets overall and bail out overspending areas, which costs the Dudley trust more than £5 million a year.

In response, Mr Austin has written to health secretary Jeremy Hunt urging him to address the concerns highlighted by Ms Clark.

He said: “Everyone knows the pressure the hospital is under.

“Local people are really worried about what will happen if the hospital has to lose one in 10 staff, and now we have it in black and white – these cuts threaten patient care.”