A LOAN of £3.4m has been take out by an NHS trust because of a serious cash shortfall.

The director of finance at Scarborough NHS Trust, in North Yorkshire, Bernard Flynn, said that despite making huge savings, the trust had still overspent by £3.4m at the end of the last financial year in March.

A three-year plan has now been agreed by the trust to reduce the deficit.

Mr Flynn said: "The three-year plan has to be realistic and achievable.

"It will be challenging and difficult, but we feel it is achievable. We cannot keep borrowing more money.

"Unless we address some of the underlying financial issues, the £3.4m will grow this year and in future years. We are looking to make as cost-effective and efficient service as we can through using new technology and techniques."