SERVICE cuts – or even a merger – are real threats looming over Macclesfield Hospital if bosses cannot clear a massive £5m debt.

Trust chief John Wilbraham has warned serious "efficiency saving" action may be needed if a planning bid to sell off unwanted land fails next week.

East Cheshire NHS Trust hopes to make at least £7.5m from the sale of the vacated "Blue Zone" on the West Park site, which would clear a path towards Foundation Trust (FT) status.

A trio of planning applications proposing the land – listed by the hospital as a £2.5m asset – be turned into a mixed development of new homes, apartments, shops, offices and a care home will be heard by a planning committee at the town hall on Monday (February 9).

Planning officers have recommended the refusal of all three applications.

If the committee agrees, the trust must appeal for extra time to clear its debt, which was £13m just two years ago – raising the spectre of service cuts and even a merger with another hospital, according to Mr Wilbraham.

He said: "If we are unsuccessful in being a foundation trust, there is a question around whether we will be an independent hospital or whether somewhere down the line another foundation trust would take over the hospital. I would hate, after the efforts of the recent past with the (saving of) children’s and maternity services, there to be a risk of us losing our independence. In a budget of £105m we are going to have to save £5m. That is a major challenge. To say we are going to achieve that without any effect on services would be difficult. We need to find that £5m in the next two financial years, which (without the sale) could only be done through efficiency savings."

FT status, which allows residents to become hospital "members" and shape its decisions, is now declared government policy for all trusts and has already been secured by neighbouring bodies in Stockport, mid-Cheshire and Warrington.

Mr Wilbraham said they needed to join those ranks by the end of 2010, or their reputation would suffer and people might start "asking what was wrong with Macclesfield".

Finance director Stuart North told the board: "We have not impacted on patient services this year, but each year it will get more of a challenge."

If planning permission goes ahead, developers Keyworker Homes plan to start building work in April.

TRUST chairman Kathy Cowell has tried to ease fears of nearby residents over the size of the proposed development.

She said the scheme "actually clears the site away to some extent" and that it would be less dense than now.

"We are really fortunate to be bringing investment and work into the town at the time of recession," she said."We have worked really hard with Macclesfield Borough Council on this application. The clock tower is a key element and needs £2.5m of investment. The developers we are working with are really committed to bringing that back up to being a building the town can be proud of. It would also provide much needed care services."

But residents on Prestbury Road disagreed.

Kerrie Green-Cronin said: "I find it hard to believe that after all the development work for what they are going to put on there, it is going to be less dense. The council’s own documents on their website talk about it not being in keeping with the original planning brief. The clock tower will be lost amongst the four-storey buildings."