Concerns are growing Government administrators could step in to run cash-strapped St Helier Hospital.

Epsom and St Helier University Hospitals NHS Trust is predicting a £19.4m deficit for the year 2012-13 and last month the trust, which spends about £9m on staff costs each month, used £7m of NHS London reserves to cover wages.

The hospitals have to reach foundation trust status in September 2014 and, it has been ruled, do not have the financial ability to do so together.

After the collapse of the proposed merger between St Helier and St George’s in Tooting in January and last month the merger between Epsom Hospital and Ashford and St Peter’s in Surrey – the Health Service Journal reported senior NHS officials believe the trust is now being seriously considered for the Department of Health’s failure regime.

Without approved pathways to foundation status for 2014, either on their own or by new mergers with other trusts, the Government administrators could step in, according to the journal.

However, the trust insists this is not “currently” being considered.

The unsustainable providers regime is a controversial process which was triggered for the South London Healthcare Trust, covering Bromley, Bexley and Greenwich, in July. The trust was forced to hand over its administration powers to the Department of Health for failing to meet prescribed standards.

When asked about Government administrators coming in to manage the trust, a Department of Health spokesman said: “The priority is for Epsom and St Helier University Hospitals Trust to provide sustainable and high-quality care to its patients.

“The trust will now be working closely with the local NHS to identify plans to help it move forward.”

A spokesperson for Epsom and St Helier University Hospitals NHS Trust said that entering the unsustainable provider regime was not something NHS London, the NHS Trust Development Authority or the Department of Health were currently considering.

They said that the £7m, which covered staff wages in October, came from £17.7m agreed by NHS London to help cover their deficit and it was something they had anticipated in line with their financial plan for the year.

The Better Services, Better Value review, which recommended St Helier Hospital should lose its accident and emergency, maternity and children’s ward, has been postponed and is now reviewing its proposals as a result of the collapse of the merger with Epsom.

Doris Richards, the chairwoman of Sutton Link, which works to improve health and social care services in the borough, said they were “extremely concerned” about the situation developing following the failure of Epsom and St Helier’s proposed mergers with other hospitals.

She said: “Both NHS London and NHS Surrey have requested suspension or halting of the Better Services Better Value process.

“Link now believes we are in an untenable position with the deficit concerns and the failure of the merger processes.

“We already know that the accident and emergency, maternity, children’s care and renal dialysis services are threatened with closure, with this additional uncertainty hanging over our hospital provision we consider that the delivery of services close to home, based on community need is seriously compromised.”

The trust has a turnover of £330m a year and the deficit is made up of £13.8m at Epsom Hospital and £5.6m at St Helier Hospital.

One reason for the deficit is the drive to treat more patients in the community, which means the hospitals receive less income.

They also lose income from the Primary Care Trusts when they fail to meet certain performance standards.

Carshalton and Wallington MP, Tom Brake, said: “Given that there has been a long history of mergers, de-mergers and consultations I think the general public are quite confused about what’s happening with our local hospital.

“I think they see this as another setback, which deepens the confusion about what the hospital situation is.

“The trust must devote all of its efforts and energy to securing the future of key services of St Helier Hospital – its accident and emergency, maternity and children’s ward.

“The collapse of the Epsom merger might create opportunity and scope for the trust to focus exclusively on that.”