DESPITE Labour's boasts about increased NHS funding, bosses at the North-East's newest hospital have admitted they are facing financial difficulties.

Tom Fitches, acting director of finance at the University Hospital of North Durham, told trust board members: "The Government announced major increases in funding to the health service for the coming year, however they also announced targets, demands and expectations which exceeded the resources reaching the trust."

Warning of an underlying deficit of more than £2m, Mr Fitches said the current financial year is "likely to be one of the most financially demanding years that the trust has had to face, and pressures will need to be managed to ensure that activity targets are met while financial balance is maintained".

His report lists a number of financial risk factors facing the former Dryburn Hospital trust.

They include worries that the extra £900,000 available to support Government waiting list initiatives may not be enough, the financial pressures arising from improved pay for junior doctors, the implications of the NHS Plan and the lack of capital to expand facilities and beds on the Dryburn Park community hospital site.

In a separate report, Isabel Kellie, director of performance management, presented figures which showed that the number of patients waiting up to 11 months for admission rose from 1,785 in April last year to 2,109 at the end of this April.

Urology is currently giving greatest cause for concern and plans were being drawn up to shift appropriate referrals to the private sector, she said.

The number of patients waiting more than 13 weeks for a first outpatient appointment also rose from 1,570 at the end of March to 2091 at the end of April, a disappointing situation, she said.

Mr Fitches said the trust was facing a very difficult year and continuing talks will be required with primary care groups and health authorities