Echo: Where will the cuts be? Derek Smith: We are having a consultation period with staff today, where we are going to talk about what we are doing and what we have to do to manage the trust finances.

The trust has a financial problem which has come out of the fact that the hospital has hired a lot more staff over the last three years, but the number of patients hasn’t increased significantly.

Unfortunately, what has been done can’t be afforded by the trust.

We will have to reduce the number of people we employ, but it means other things as well. We have already cut down on overtime and we are reducing agency staff.

What main services are you going to lose? We are looking at services at the moment and considering one or two, but we haven’t got all the information together in relation to them, but for the most part the hospital will provide the range of services that it provides today.

So we will certainly provide emergency medicine, emergency surgery, trauma, all the planned specialities that go with that like surgery, orthopaedics, children’s services, neonatal services and maternity services but there are maybe other, more complicated, services which can be provided by the community rather than the hospitals.

What services specifically? One transferring already at the end of the year is the child and adolescent mental health services.

The local primary care trust NHS Dorset have said they are prepared and would like to run the sexual health services we currently provide.

We are going to have to reduce the number of beds by being more efficient and we are going to have to sort out the way in which we organise some of our services.

How will you make these changes? We will have to make sure that we organise our operating sessions, our out-patients, in such a way that they are fully used and therefore for each patient – seen or treated – we are doing that at the least possible cost.

We have to have an eye on the quality of service. If we damage the quality of service provided then of course we have lost the core essence of the hospital.

How long will the consultation period go on for? There will be several stages of consultation for the staff. We will start at Christmas and carry on until the middle of next year so that we are taking their various views on board and acting on the things they want us to.

What is the financial position of DCH? The money position is that by the end of this year the trust will have something like a £7.5million deficit. If we did nothing that would climb to about £17million by March 2012.

Are similar-sized hospitals facing the same kind of £7.5million financial deficit as DCH? No, it is worse off because of the position that it’s got into with recruiting people. Similar-sized hospitals elsewhere are breaking even.

Would you say the hospital is in this position because of bad board management? I think there weren’t specific controls in place, although many of the staff were recruited for good reason.

More consultants were recruited because that improved the quality of the service, we employed more cleaners so the hospital would be more hygienic, more nurses so that they could provide a better quality of ward level care, more administrative and clerical staff to manage targets. All of these in their own right are not bad things – we did it to an extent that was too great for our finances.

How long has the hospital been in this much of a deficit? The hospital was in £1.8million deficit last year and that was because these increases were beginning to bite and in the previous year they had a small surplus.