East Kent Hospital Trust is facing a budget shortfall of almost £40 million according to chief executive Chris Bown.

At a board meeting earlier today, Mr Bown warned there may be "unpopular decisions ahead" as the trust attempts to return to the black.

He told the board that even if the trust delivers a planned £16 million savings plan, it could still face a deficit of about £37 million by the end of this financial year.

The reasons for the massive shortfall includes a heavy reliance on expensive temporary staff, particularly medical locums.

"This is a huge task and we will have some difficult and no doubt unpopular decisions to make" - Trust chief executive Chris Bown

The trust has spent £6.7 million on temporary staff in just three months, including £3.7 million on locums and £1.4 million on nursing.

The chief executive also blamed extra out-sourcing to the private sector to meet the government's waiting time targets.

This cost the trust £2.8 million in the first 3 months of this year.

In his report today Mr Bown told the board the trust's financial position "has been deteriorating rapidly".

The trust has now established a Financial Recovery Group to try to wrestle the finances back in order.

It plans to reduce the 2015/16 capital programme and sell assets that are "surplus to requirement."

It is not yet clear what these assets may be, but earlier this year a report to trust directors revealed a proposal to house high-risk and emergency services on just one site - putting the A&E departments at Ashford and Margate at risk of closure.

In his report, Mr Bown said: "We need to get a firm grip on the finances and we have and are putting in place further measures to both reduce our expenditure and increase income across the trust.

"This is a huge task and we will have some difficult and no doubt unpopular decisions to make as we develop our three year financial recovery programme.

"Patients are at the heart of services and we will not compromise patient safety, but to be able to invest in services for the future, we need to ensure that we bring the budget back into surplus."

East Kent Hospitals Trust has so far not had to seek cash support, known as ‘distressed funding’, from the Department of Health, but Mr Bown warned the precarious financial position "makes this eventuality a very high risk."

East Kent Hospitals Trust runs three acute hospitals, including the William Harvey Hospital in Ashford, Kent and Canterbury Hospital, and Queen Elizabeth The Queen Mother Hospital in Margate.