Now drowning in debt, Hinchingbrooke Hospital could be downgraded and lose some services. The East of England Strategic Health Authority is considering whether district general hospitals are really necessary. A report on Hinchingbrooke is expected next

The Princess Royal and trust chairman Sue Smith at its opening a year ago.

Now drowning in debt, Hinchingbrooke Hospital could be downgraded and lose some services.

The East of England Strategic Health Authority is considering whether district general hospitals are really necessary. A report on Hinchingbrooke is expected next month.

Ironically, the hospital has been plunged into the red by a Government that insists that efficient hospitals pay up to help the inefficient ones - that means that the efficient ones go broke too.

This is what has happened to Hinchingbrooke. This year it will have to pay out £19million of money it has earned for operations and medical treatment - ordered by Whitehall because Hinchingbrooke is efficient.

On Thursday, the hospital's chief executive, Douglas Pattisson, resigned - as reported on The Hunts Post website - in the midst of financial chaos at a popular hospital that is delivering clinical excellence.

He resigned at the end of a board meeting as finance colleagues warned that the hospital trust's deficit could top £33million by March.

The hospital now owes £8.83million. By March the debt is forecast to be between £24 and £33million. Its budget is £72million.

If the hospital had not started the year with a deficit of £7.75million and it didn't have to pay £19million back to the Government to prop-up less efficient hospitals, it could have made a profit on the year. The hospital is being strangled by the Government.

Mr Pattisson will leave the hospital on September 22 - next Friday - after six years in charge of improvements, including building a £22million treatment centre. This costs the hospital £250,000 a month on repayments to its private builders.

Plus, the centre has treated far fewer patients than expected so yielded less money from the region's primary care trusts to pay for that treatment.

The Hunts Post had anticipated a crisis for some weeks, as it became clear that the hospital was unlikely to be able to get its finances into balance by March 31 2007, as required by the Department of Health.

Yet, in spite of the financial position, Hinchingbrooke remains one of the most effective and efficient acute hospitals in the UK.

* Its accident and emergency department is consistently in the top 10.

* Hinchingbrooke remains in the top 40 out of 130 acute trusts.

* It delivers healthcare at less cost than 90 per cent of other acute trusts.

* This month, the Healthcare Commission rated it "excellent" for diagnosis and medical management.

At the heart of Hinchingbrooke's problems is a combination of a 23 per cent reduction in NHS funding when it is treating more and more patients - and a requirement to repay money to the Government - money it earns from treating patients.

Now, on top of that, primary care trusts, which provide GP and NHS dental services and fund most of Hinchingbrooke's NHS income, are being reorganised in Cambridgeshire and have had their income cut.

In Huntingdonshire's case, money has been diverted to heavily loss-making trusts in Cambridge city and South Cambridgeshire and to fund foundation trusts such as Papworth and Addenbrooke's Hospital in Cambridge.

If Hinchingbrooke had also achieved foundation status - and it came very close to doing so - it would not be in this mess, because that £19million would have stayed in the bank.

COMMENT: HUNTINGDON'S district general hospital at Hinchingbrooke is under threat - partly because of the mad way the Government finances the NHS and partly - bizzarely - because it is clinically efficient.

Hospital procedures are now paid for at a standard rate set by the Department of Health - "payment by results".

But, because other hospitals are inefficient, they have to be propped up financially by efficient ones.

Even to consider downgrading Hinchingbrooke Hospital is unthinkable.

It is a hospital applauded by its patients. It is efficient and millions have been spent on upgrading it: £6.5million on a new accident and emergency centre, £22million on a new treatment centre for surgery and £7.5million is planned for a new 25-bed children's centre on the site.

Why is the Government undermining one of the best hospitals in Britain?