NHS services in Calderdale and Huddersfield face a budget shortfall of more than £280m over the next seven years.
The huge financial challenge facing NHS organisations is laid bare in a report which sets out the case for closing Huddersfield’s A&E and centralising emergency care in Halifax.
Under proposals made public on Friday, Calderdale Royal Hospital could become the trust’s main A&E.
Planned NHS care would be carried out at a new hospital in Huddersfield, which would also have an “urgent care centre.”
Huddersfield’s main hospital site could be knocked down.
A report by NHS commissioners said Calderdale and Huddersfield NHS Foundation Trust (CHFT), which runs the two hospitals, was “financially unsustainable” and services must be reorganised to be affordable.
The hospital trust will be around £20m in deficit at the end of this financial year, but the report warns that the cash shortfall will double to more than £40m next year.
The organisation will remain in deficit over the following five years as the combined shortfall reaches £204m by 2021-22,
Cuts to government funding mean £65m in savings must also be made in that time, said the report by Calderdale and Greater Huddersfield Clinical Commissioning Groups (CCGs).
It said: “Overall, despite exceeding national expectation on efficiency savings, CHFT is no longer financially viable as it is currently configured.”
In the same period the CCGs, which control the local health budget, will also see their combined budget increase by 8.69 per cent - way short of the expected increase in expenditure of 15.6 per cent.
The report said: “At the end of the seven years in 2021/22 the financial challenge facing the area of Calderdale
and Greater Huddersfield (health sector only) amounts to £281m.
“The funding available to the CCGs will be insufficient to cover the rising demand for health services, the cost of inflation and any other future investments aimed at improving patient outcomes.
“Despite increasing resources available, growth in expenditure exceeds this.”
Financial pressures facing the hospitals include the cost of running two A&E departments less that six miles apart, the report said.
The organisation is also making costly repayments for Calderdale Royal Hospital, which is leased back from the private sector under a Private Finance Initiative (PFI) scheme.
It emerged last week that NHS bosses considered building a new hospital and vacating the existing sites in Halifax and Huddersfield, but are unable to do so because of a £200m “break clause” penalty in the PFI contract.
The CCG report said there was “no negotiable exit route” from the PFI.
At a meeting on Wednesday the CCGs will decide whether to launch a public consultation on the A&E plans.