Peterborough and Stamford NHS trust rescue plan outlined
A hospital trust is to make savings of £10m a year and start generating income to tackle a £40m budget shortfall.
It is part of a five-year rescue plan for Peterborough and Stamford NHS Foundation Trust, accepted by health watchdog Monitor.
Monitor said debt problems remain severe as a result of a "costly 35-year private finance scheme (PFI) undertaken by previous trust managers".
Hospitals in Peterborough, Stamford and Rutland will remain open.
Monitor said it was confident the current trust board and management team could deliver the rescue plan, with the help of continued government funding.
Bids are to be invited from other health providers to use under-utilised space and generate extra income.'Emergency funding'
Currently, the fourth floor of Peterborough Hospital is being used as offices when its purpose was originally for clinical beds.
More liaison with local commissioners and providers of services will be carried out to generate income or to share activities and the trust is to seek more government financial support.
Monitor chief executive Dr David Bennett said: "The problems at Peterborough and Stamford Hospitals NHS Foundation Trust are severe - it is only able to provide services to patients due to emergency funding from the Department of Health."
The Department of Health is currently providing £40m to the trust each year to continue to fund services.
The trust is relatively inefficient in some areas and is not getting paid for all its work and the cash injection relates to a costly private finance scheme, Monitor said.
Dr Bennett said: "The plans proposed by the team of experts we sent in, which the trust has committed to implement, represent the best possible answer to an otherwise intractable financial problem.
"It secures services for patients in the long run."