A “WORLD-renowned” mental health hospital is set to close its inpatient services due to the “significant impact” of Government changes.

The Retreat, in Heslington Road, York, is a charitable, not-for-profit provider of specialist mental health care founded in 1796.

It cares for people with complex issues including eating disorders, dementia, trauma and other mental health difficulties.

But a spokesman for the hospital said it is now considering plans to withdraw its inpatient services. There are currently 36 inpatients in the hospital and eight tenants in the Learning Disability Service. No patients have been given notice to leave but a consultation has been launched on the proposal.

The spokesman said: “We are a small organisation in the field of mental health, albeit with a big reputation and long history. The Government’s Five Year Forward View is having a significant impact on demand for our services as we experience a clear drive towards reducing inpatient beds, length of stay and out of area placements.

“This has ultimately led to a decline in demand for our inpatient services. We are however, determined to survive and to continue to provide high quality services that support some of the most vulnerable people in our society.”

The organisation, which was rated as good in all areas by the Care Quality Commission, is planning to expand its outpatient services and “exploring options” for other partnership opportunities.

But former consultant psychiatrist at Bootham Park Hospital Dr Bob Adams said the closure of inpatient services would be a “great loss” for York.

He said: “There are a certain proportion of patients who can only be managed in a hospital environment because of the nature of their conditions and the need for specialist care.

“The Retreat was a pioneering hospital built in order to offer care for the mentally ill. It’s world-renowned and everyone in psychiatry has heard of it. My experience is that it’s very good and they provide excellent care.

“It will be a terrible loss to York.”

He also raised concerns about the privatisation of mental health services for people in need of inpatient care.

Dr Adams added: “What could replace it is privately run hospitals with profits going to shareholders.”

The Retreat is a Quaker organisation founded by William Tuke, a retired tea merchant, as a place where people in mental distress could recover in a sympathetic environment.

A spokesman for The Retreat said the organisation had faced financial pressures but has reserves. He did not comment on any possible job losses but said: “We are working very closely with our staff, patients, carers and commissioners to ensure that we continue to provide high quality services during this time and expect a final decision about the future of the hospital later in the year. Our patients continue to be our priority.”