HEALTH watchdog Monitor has launched an investigation into Southend Hospital finances over fears for its future.

The regulator announced today it is to probe the financial sustainability of the hospital trust.

Monitor said it was concerned by the deterioration in Southend’s finances after the trust recorded a larger deficit of £9.8m for 2014/15 than the planned £7.8m. The organisation said it is also worried that the trust does not have a realistic plan to recover from this situation.

Monitor said its investigation will "look into the state of hospital finances, assess the strength of the trust’s financial management, and explore ways of improving its sustainability on behalf of patients across the region".

The investigation will also examine how the trust is working with other local health and care organisations to respond to the financial challenges it faces.

Katherine Cawley, Regional Director at Monitor, said: “People are relying on Southend to provide them with quality healthcare now and in the future, and we are concerned that this may be at risk because of the trust’s poor financial performance.

“We have launched this investigation to find out more about the financial situation at the trust and to establish what can be done to improve things.”

Alan Tobias OBE, chairman of Southend Hospital, said:  “The overspend is a result of vital investment in services and more staff to ensure high standards of patient care as well as the rise in attendances the hospital is continuing to see.

“Having a planned deficit has seen our continuity of service risk rating (CoSRR) drop from 2 to 1, and means Monitor, the health regulator, is planning to carry out a review of our finances.

“The review is an automatic requirement of its role in respect of any NHS Foundation Trust which is forecasting deficit and Monitor rightly needs to ensure our future plans are financially sustainable.

“We welcome this review and we will take this opportunity to clearly demonstrate to Monitor – as well as our patients and stakeholders – our future financial plans are both robust and sustainable.”

Sue Hardy, chief executive of the hospital, said: “We have rightly taken a deliberate decision to prioritise the quality and safety of patient care over financial performance in our business planning, for example, the necessary use of agency staff - at an increased cost - to fill vacant nursing positions while permanent staff were recruited.

“But we have not been complacent about overspending and although the high cost of agency staff has been a major contribution, we have been praised for how we have tackled this in recent months.”

Ms Hardy said demands on services, particular over the winter, had also impacted on the hospital.