THE head of a health trust has pledged to tackle a recurring cash shortfall of £16m.

Simon Pleydell, chief executive of South Tees NHS Trust, spoke out yesterday after the organisation was told it needed to work out a financial recovery plan.

A Healthcare Commission report spotlights the financial situation of the trust, which runs hospitals in Northallerton and Middlesbrough.

But Mr Pleydell told the D&S Times that talks had already started with partner organisations to tackle the problem.

Ruling out job losses, he said: "We will solve this through partnership and planning.

"We have just completed a round of talks with primary care trusts regarding their intentions for the financial year."

Mr Pleydell said that subject to readjustments, the trust had a recurring deficit of £16m on a budget of more than £300m - about 5pc.

In the last two years, there had been non-recurring help from other agencies.

"The report says we should not plan to live on that and so we will sit down with our partners to look at how we can do this," said Mr Pleydell, who has been head of the trust for seven months.

"It is not about drastic measures, but long-term planning for a sound basis."

The report also says the trust needs to work with partners on the future of the Friarage Hospital, Northallerton, and ensure sustainable staffing levels ahead of new laws on doctors' hours.

The organisation's difficulty in meeting waiting time targets is highlighted.

But the independent review also praises patient care, a major merger which brought the Friarage into the Middlesbrough-based fold and action to tackle high MRSA rates.

The Friarage was praised for integrating NHS staff with military personnel working at the attached Ministry of Defence hospital unit and after pointing out that some facilities were old and cramped, the review noted the trust was implementing an £18m upgrade.

"The trust has been through significant change over the past two years," says the report.

Areas for action include development of a long-term financial recovery plan; working with healthcare groups and patients to decide on the future of the Friarage and ensuring staffing levels are sustainable, given the current position and requirements of European law on doctors' hours coming into force in August.

The trust has been creating extended roles, such as nurse and midwife consultants and clinical matrons, and inspectors praised work in developing healthcare assistants to take more active roles in midwifery.

The trust was also said to provide good training for doctors.

On waiting list targets, in September 2003 more than 200 people were waiting more than 26 weeks for a first out-patient appointment and some up to 14 months for admission to neurosurgery and plastic surgery.

Extra plastic surgeons have now been recruited and by last November no-one was waiting longer than 21 weeks for a first appointment or a year for admission.

The report says the trust has acted to address high MRSA rates, including new infection control procedures and greater staff awareness.

But the inspectors would still like to see more progress in hygiene and health and safety.

Healthcare Commission head of operational development Marcia Fry said: "The commitment of trust staff to give good quality care is to be applauded. But we found areas which need further work.

"The trust will be producing an action plan in response to our report and we will follow up on implementation of that plan."

Mr Pleydell welcomed the report as "a positive one which will be of enormous help".

"Most importantly, the report commends staff commitment to providing good quality care," he said.

"The inspectors acknowledged the enormous changes we have gone through with the merger with the Friarage and the achievement of the new James Cook University Hospital.

"We know we have more work to do to integrate our colleagues at the Friarage into the trust and to ensure the hospital has a sustainable vision for the future.

"The report commended our redevelopment of the Friarage, which we think will create an excellent environment for both patients and staff.

"The report is right to highlight our underlying financial position and we are working hard to bring ourselves back into the healthy financial situation of five years ago."

Mr Pleydell was anxious to underline the achievements and commitment of staff.

"We are pleased the report mentions some of their extended roles," he said "I am proud of their achievements and it is fitting that their enthusiasm and willingness to work flexibly is commended.

"We feel the report is an accurate reflection of the trust. It will prove useful in guiding our future agenda.

"Our challenge now is to work with all our partners, patients, public and staff to implement the recommendations.