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A Midlands hospital trust faces potential administration after experts were called in on Tuesday to assess its financial situation, an independent health regulator said on Tuesday.

Mid Staffordshire NHS Foundation Trust is at the centre of an £11m public inquiry after a critical report by the Healthcare Commission, which revealed a catalogue of failings. It found that between 400 and 1,200 more people died than would have been expected in a three-year period from 2005 to 2008.

The team of financial advisers, accountants and lawyers will advise the trust how to improve its services ahead of the inquiry’s report due out next month.

They will explore options, including outsourcing services to private healthcare providers, and could even recommend that the trust be put into special administration. Their final report will be delivered in the spring to Monitor, the independent health regulator.

Dr David Bennett, chair and interim chief executive of Monitor, said there had been “significant” improvements in clinical care at the trust but they were now searching for a longer term solution.

Lyn Hill-Tout, the trust’s chief executive, said she welcomed the involvement of the regulator. But she said there had been a “growing feeling of uncertainty” about the future of the Stafford and Cannock Chase hospitals because of reviews of the trust and NHS reform at a national level.

The inquiry into deaths at the trust, led by Robert Francis QC, began in November 2010 and concluded its hearings in December. Patients groups have criticised a delay in the report which will land on ministers’ desks on October 15.

South London Healthcare Trust became the first NHS trust to be placed into administration when Andrew Lansley, then health secretary, replaced managers with government appointees in June.

The Department of Health has identified 21 trusts facing financial difficulties. It was forced to pay out £415m in emergency bailouts to NHS hospitals in the year to May, almost double the amount issued last year.

Mid Staffordshire received £21m, one of only two recipients of the government’s flagship foundation status to get emergency funding. The trust is facing some of the biggest funding cuts in the country and is expected to lose about 12 per cent of its cash income between 2011-12 and 2014-15.

A spokesperson for the health department said that in spite of the improvements, the trust was still facing “serious financial challenges”. “This puts at risk its work on improving services for patients,” the spokesperson said.

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