MORE than 1000 employees at York Hospital Trust are due to miss out on planned pay rises as the trust struggles to cope with a multimillion pound black hole.

York Teaching Hospital NHS Foundation Trust is expecting to have a £9.7million end-of-year debt and has said it regrettably cannot continue to be a Living Wage employer.

The trust signed up to pay the Living Wage in April 2014, and currently pays its lowest paid staff £7.85 an hour - £1.35 an hour more than minimum wage.

But it said adopting the higher new rate of £8.25 an hour for about 1100 people would cost almost £1million a year, an amount it cannot justify spending.

The announcement comes as Vale of York Clinical Commissioning Group (CCG) continues to face formal intervention from NHS England over financial difficulties which could mean they finish the year with a deficit of up to £4million, for reasons including an overspend at York Hospital trust, an unexpected £700,000 bill for out-of-area placements of mental health patients and the cost of extra prescribing.

Rachael Maskell, MP for York Central, said: "The whole system is imploding. I think the finances are a barometer for what is actually happening in the NHS and the failure of the system."

She said higher demand and lack of social care support means "everything is being driven into the most expensive part of the health service, the acute sector".

Patrick Crowley, chief executive of York Teaching Hospital NHS Foundation Trust, said the hospital is due to have a planned deficit for the first time in its history.

He said: "This is disappointing given our track record of strong financial performance, however it is not surprising given the financial position of the NHS overall, and the challenge we have faced year on year to make efficiencies.

“Despite this difficult financial context, I am proud that we were the first NHS Trust in the country to adopt the living wage, and its introduction has meant that around 800 of our lowest-paid staff already benefit from a higher rate of basic pay than that which is set out in NHS terms and conditions. We have calculated the impact of introducing the recommended increase in the Living Wage, to be effective from 1 April 2016, and it would cost an additional £0.9m. This would be a significant increase and, in our current financial position, one that would be extremely challenging for us to implement, and might leave us open to criticism by our regulators. However, I remain fully committed to the principles of the Living Wage and we will continue to pay at the current level for this group of staff".

Back in September, The Press reported how York GPs and practice managers made a statement of no confidence against senior management of Vale of York CCG who disagreed with financial recovery plans submitted to NHS England.

The organisation is "fully briefed" on the financial situation, a spokeswoman said, who said the disagreement with GPs has since been resolved.

A further draft focusing on the recurrent underlying position going into 2016/17 is being developed for mid December, according to a report to be considered at a meeting of the CCG's governing body on Thursday.

Commissioners are forecasting a year end of year deficit of £1.1m, which is £5m below plan, but said there is a "risk adjusted deficit" of £4million taking other matters into account.

A spokeswoman said: "There are a number of reasons for this including increased activity in acute hospital contracts, a forecast overspend in primary care prescribing and an underlying gap in the financial plan relating to savings plans not yet identified.

"The CCG had an underlying efficiency requirement in its Financial Plan for 2015-16 of £19m and while some of this has been closed through a number of measures in-year, pressures on urgent care over and above those planned have caused additional financial pressures. "These financial challenges make it even more important that the CCG continues to focus on its vision of transforming and integrating local health and social care services to deliver the best quality care for everyone in Vale of York."