A FINANCIALLY troubled hospital trust has warned that staff might have to be laid off unless losses are reduced.

South Tees Hospitals NHS Trust, which runs the 1,000-bed James Cook University Hospital 'superhospital' in Middlesbrough as well as the smaller Friarage Hospital in Northallerton, North Yorkshire is forecasting a £13m overspend by the end of the financial year.

The trust has also had to ask regional NHS officials to provide a loan of £12m to help meet other costs.

In December officials imposed a selective recruitment freeze in some areas and announced they were looking for savings.

Yesterday the response to the financial crisis hardened with the trust board approving a tough new savings package.

A significant element of the plan involves a five per cent reduction in staffing costs across the trust.

This will mean that a complete recruitment freeze will be introduced, other than in very exceptional circumstances.

Chief executive, Simon Pleydell, said: "I appreciate that many colleagues across the trust are worried about redundancies. While we cannot rule this out, making people redundant will be an absolute last resort."

The fact that staff turnover is about 12 per cent a year, should help the trust to make progress towards a reduction in staffing costs, he added.

Mr Pleydell said the trust was also looking at different working practices.

"It could be that we can provide a service with fewer staff working differently," he added.

Recently the City Hospitals Sunderland NHS Trust laid off 71 part time support staff.

Liz Twist, regional spokesman for the union Unison, said: "We are really concerned about the pressures this will place on staff who are still working and on patient services."

"The NHS needs more resources," she added.