YORK Hospital bosses expect to see about £3 million lopped off the organisation's income this year under cost-cutting plans from the beleaguered local primary care trust, a report says.

Earlier this month, The Press revealed that the Selby and York Primary Care Trust (PCT) wanted to cut its spending at the hospital by a massive £14 million over the next finance year as it attempted the huge task of balancing its books by April 2007.

Hospital chief executive Jim Easton said at the time a cut of this amount would have a "huge negative impact" but added the hospital's own estimates predicted the figure would be far less.

Now Patrick Crowley, the hospital's director of finance, has said in a board report that the organisation was "assuming" a much lower figure of £3.1million will be sliced off its income under the PCT's cost-saving measures.

He said in the report: "Selby and York PCT has indicated it wishes to remove £14million from the 2006/07 Service Level Agreement to balance its 2006/07 financial position, although firm and deliverable plans for this are yet to be confirmed.

"However, the (hospital) trust is currently assuming that a net £3.1million of activity will be successfully removed."

Under Government rules, the PCT must balance its books by April 2007, and to do this it needs to cut its spending by £22.8 million over the year.

A series of plans has been drawn up to make these savings, including creating "thresholds" for certain treatments like hip and knee replacements in an attempt to streamline hospital referrals across North Yorkshire.

Procedures like vasectomies and operations for varicose veins and bunions are also being strictly limited where they are deemed to be "cosmetic" or "social".

Other schemes like a "fast response team" and community matrons have been set up to try to keep more people out of hospital so they can be treated in the community, which will cost less money.

But the hospital has estimated that despite these measures, its income will not drop by £14 million over the next finance year, and its finance team has come up with the more conservative figure of £3.1 million.

Mr Crowley admitted in his report that if the PCT's plans were more successful than the hospital predicted, there was a risk it would itself not manage to balance its own books.

Mike Proctor, director of nursing, said a series of measures were being put in place to save the money, including possibly closing more beds.

He said: "It's not just about staff and beds we're looking at a whole series of other measures.