THE Royal Devon and Exeter Hospital is facing a future of life in the red.
The head of the hospital trust has declared that the situation is "unsustainable".
Following years of achieving a financial surplus, the hospital is reporting a deficit of £3.1 million for the year ending March 31, 2014.
Now it has emerged that the hospital is also planning for a deficit of £8.9million in 2014/14 and a staggering £13.5million the following year.
To achieve this recurrent savings of £14million and £10million will be required.
James Brent chairman of the RD&E NHS Foundation Trust, in a letter to MPs seen by the Echo, said: "The Board is very clear that the safety of the care we provide is paramount and will not be compromised but a recurrent funding solution will need to be found.
"The current situation is unsustainable.
Mr Brent added that the trust continued to perform well and staff continued to deliver excellent care to patients.
"There is much to be proud of in the services we deliver."
Mr Brent said that following years of sustained growth funding for the NHS, while ring fenced and protected in real terms, had not increased with the demand for care and spending on acute care has reduced.
"During the last four years the RD&E has delivered in excess of £50million of recurrent savings in response to the reduction in acute spending but each year further incremental savings have become more difficult to achieve."
Exeter MP Ben Bradshaw said: "It is alarming when such a high performing and well run hospital as the RD &E is having to go into significant deficit simply to ensure it can continue to provide safe care to patients.
" It shows there is something very wrong with the Government's health policies.
"Ministers have so far failed to listen to representations I and other MPs have made about the unsustainable pressures on the NHS from their disastrous upheaval of the service at the same time of unprecedented budgetary constraint.
"Staff and managers at the RD and E continue to do an amazing job in increasingly difficult circumstances, but this should serve as a wake-up call to the Government."
Explaining the £3.1 million defficit, Mr Brent said: "The main reason for the deficit was an inability to meet the level of the cost improvement programme required both in year and on a recurrent basis to meet the year on year reduction in acute spend, without compromising the other priorities, particularly safety, outcomes and quality which the board has established for the RD&E.
"As a demonstrably efficient trust, finding savings of this magnitude year on year is a major challenge and is becoming increasingly hard to achieve and this year, for the first time, the trust has not been able to achieve the required level of saving.
"As a consequence, £10 million of recurrent savings not achieved in the previous year must be carried forward into the current financial year.
Mr Brent points out that under the application of the Market Forces Factor the RD&E would receive an additional £18 million - if it was based in Bristol.
Monitor, the NHS England and the NHS Trust Development Authority, said the regulator was aware of the financial position at Royal Devon and Exeter NHS Foundation Trust.
It said it was now working to ensure the hospital can "continue to provide good quality care for patients at the same time as balancing its books."
The statement said: "Devon has been identified by Monitor as one of eleven financially challenged health economies in England that are to receive expert help with strategic planning in order to secure the services that patients need."
Angela Pedder, the trust's chief executive, said the NHS environment was "very challenging" because the hospital needs to balance the delivery of safe care for patients with finances.
