BOSSES at Basingstoke hospital are facing their biggest-ever financial challenge as they bid to save a total of £11million before next April.

The daunting figure, made up of a £7.2million saving the hospital must make itself to break even and £3.8million to be saved jointly with the local primary care trust, represents what hospital chief executive Mary Edwards has described as the "most challenging financial position ever".

Health chiefs say that the total will be raised through various measures to control costs, maximise income and reduce expenditure. If the money is not saved, the hospital will be massively in the red.

Speaking before the recovery plan for the 2004/2005 financial year was approved, Mrs Edwards told a meeting of members of the North Hampshire Hospitals NHS Trust board: "We have been successful in achieving ever-increasingly challenging savings targets year on year, but the underlying position has not been tackled."

In order to save cash, members heard that the hospital - which broke even last year after hitting its savings target of £5.6million - is implementing a number of measures.

These range from negotiating better contracts to buy items such as x-ray film and anaesthetic, to looking for cheaper alternatives to drugs which are still expensive because they are under patent.

However, bosses claim patients will not miss out on new drugs approved by the NHS and have said they are working hard so that people notice no difference in services.

Mrs Edwards told The Gazette: "I hope patients don't notice any detrimental effect. By becoming more and more efficient, patients might see benefits over time because we do not have to reduce services to save money.

"The aim is to cater for health needs, but at a cheaper cost. It is a very tough challenge but we are very determined to do it. We can't continue to live beyond our means."

Bosses hope that the new Diagnosis and Treatment Centre, due to open at the end of the year, will help attract more patients to Basingstoke hospital - meaning more money in its coffers.

Bosses believe that as Basingstoke has relatively short waiting times in many fields, they can build on this success.

Through the Patient Choice scheme, people waiting more than six months for a non-emergency procedure can opt to have treatment at an alternative provider, and Basingstoke hospital hopes to explore new markets in Andover and Berkshire to take advantage of its free capacity.

In a joint move to save cash, the hospital - which has an income of about £100million per year - and the North Hampshire Primary Care Trust will look at measures including keeping people out of hospital by providing services closer to home.

Mrs Edwards mentioned that a trial is currently taking place in the field of orthopaedics where, instead of GPs referring people to hospital immediately, patients can get access to a specialist GP who can then refer them to a physiotherapist himself.

Mrs Edwards said that trusts across the Hampshire and Isle of Wight area are facing having to make similar savings to balance the books.

She added: "We are no worse than the rest. All trusts have challenges to achieve."