WORK is due to start by the end of the year on improvements to Scarborough General Hospital.

Alison Guy, chief executive of the Scarborough and North East Yorkshire NHS Trust, says in her annual report that confirmation has been received about £10m to invest in endoscopy, theatre and other facilities.

"We have had commitments from the Strategic Health Authority to begin to invest in new buildings within the trust to eradicate our old and cramped areas," she said.

She said a clinical strategy was being developed with the two local primary care trusts in the area, which will result in further developments.

"In addition, we have worked with staff from all levels to develop a strategic direction which will be continually reviewed over the next few years. There will be many changes in the future as we seek to make the best use of our hospital sites," said Mrs Guy.

Chairman Richard Grunwell said the past year had been one of "success and tribulation," adding: "The trust was awarded a one-star performance rating by the Department of Health, but we have got £10m to carry out the developments."

He said the trust was now into the second year of its financial recovery plan, which had been agreed with the strategic authority and the primary care trusts.

Finance director Bernard Flynn said there had been a small surplus on budgets in the last financial year as a result of using reserves and transferring capital of £500,000 and support of £3.3m from the Strategic Health Authority.

He said it was now on target to achieve a financial balance by the end of the present financial year.

Income for the trust amounted to £87.3m.

It had also benefited from funding towards the cost of treating more patients, meeting waiting list targets as well as income for pay awards.

Of the total expenditure, £52.1m was for staff pay, said Mr Flynn, who added that the trust now had assets worth £72m.