Hospital bosses will be handed £8m in emergency bail-out funding to help tackle a financial deficit.
Debt-hit Mid Yorkshire Hospitals Trust has been told it will receive the cash from the government’s’ NHS Trust Development Authority (TDA).
Mid Yorkshire, which runs Pinderfields, Pontefract and Dewsbury hospitals, will reduce its deficit from around £17m to £9m.
A report to the TDA’s last board meeting said the cash was being made available to trusts which had “exceptional” financial problems.
Mid Yorkshire has made a string of budget cuts to reduce its debts, including redundancies and cutting the pay of some hospital workers.
Caroline Wood, the trust’s associate director of finance, said: “The TDA has advised the trust that we will receive £8m under the deficit funding arrangement to improve our 2014-15 financial position beyond our agreed financial plan.
“The impact of this funding will be to reduce our full year deficit this year from our plan of £17.1m to £9.1m, a reduction of £8m.”
The TDA report said conditions attached to the bail-out included restriction on the pay of senior executives.
Mid Yorkshire is facing rising repayments, currently of more than £40m a year, after new hospitals were built in Wakefield and Pontefract under a Private Finance Initiative (PFI).
The trust signed a deal to lease back the hospitals from private companies over a 35-year period.
PFI schemes have been criticised as a bad deal for the public sector. But Mid Yorkshire has insisted the deal was good value for money.