MAJOR spending to haul Basildon Hospital out of special measures has left the trust needing £44.7million in loans.

The hospital was placed in special measures in 2013 amid concerns about high mortality rates, but it is now rated good overall following a glowing report from inspectors last summer.

However, it remains in breach of its licence due to poor financial management, with hospital bosses anticipating a £29.9million deficit for 2016/17-even if it gets the loans it requires to operate as planned.

Health regulator Monitor stepped in last February after finding the hospital was "breaching its licence to provide healthcare services on a sustainable basis" and demanded action to improve both its short-term and long-term finances.

In a report to board members, Andy Ray, hospital deputy director of finance, said: "The need and obligation to improve and sustain quality has left the trust financially challenged, with a depletion of its balance sheet flexibilities.

"The board of directors is clear that quality cannot be compromised to meet financial targets but fully acknowledges its duty to the taxpayer in its licence conditions.

"The board is determined to address the financial challenges over the coming years."

Mr Ray warned the proposed financial plan for 2016/17 would mean the trust remains in breach of its licence, having failed to implement systems to ensure "effective financial decision-making, management and control".

The £44.7million of support includes £11.4million of revenue and £2.2million in loans which have already been agreed and carried forward from this year.

The trust also requires an extra £31.1million in new loans, for which there are currently no agreements in place.

The hospital hired 200 extra nurses, 50 doctors and 150 other clinical staff between 2012 and 2014 as it tried to improve patient care.

But the investment has come at a cost, with a £31.7million deficit in 2015/16, despite a £38.9million bailout from the Government to help with running costs.

Sam Older, regional organiser for Unison, which represents hospital staff, has called for central government to step in to ensure the hospital can continue to keep standards high.

He said: "Basildon is not the only trust in this position - there is a difference in the NHS between Monitor, which focuses on finance, and the Care Quality Commission, which focuses on patient care.

"We need safe and caring hospitals and when this was a concern at Basildon a number of years ago, it was improved through investment.

"From our perspective, we would like to see that sort of investment to continue."

A year ago, a review by accountants Grant Thornton, a condition of the hospital's Monitor restrictions, identified "significant shortcomings" in its financial administration.

Grant Thornton is due to carry out a review in June to check whether its recommendations have been properly addressed.