Imperial College NHS Trust faces a budget shortfall of £40m next year, according to CEO of the trust and Pro-Rector for the college, Stephen Smith.

Recently published board papers have revealed, for the first time, the state of ongoing service level agreements for Imperial NHS Trust in 2011-12. Stephen Smith announced the £40m budget gap in a speech to the trust’s board of directors and explained it was “due to volume and funding withdrawals” from the services commissioned by local Primary Care Trusts.

A spokeswoman for the trust said that £40m was “not a definite sum” and would depend on the outcome of the ongoing negotiations. She also refuted reports in the media that the trust is in ‘turnaround’. The spokeswoman said that the current financial environment faced by acute trusts was “extremely tough”. She also described the size and scale of the cuts that trusts have been asked to make as “very challenging”.

A spokesman for NHS London said that there were always “robust discussions” about hospital budgets at this time of year, and that it was “committed to managing constrained levels of funding and using its budget more efficiently”. He said that the NHS in London was “working hard” at this, and would be “radically slimming down its management structures”.

The mounting financial challenge comes at a time when Imperial will also lose three of its senior executives. Stephen Smith will leave Imperial in September to step up his involvement in the newly founded Lee Kong Chian Medical School in Singapore, a joint venture between Imperial and Nanyang Technological University. In his place, Mark Davies has been appointed as interim CEO of the trust. Chief financial officer, Tony Graff, will also leave at the end of the month. Chief information officer, Alistair Shearin, will retire in September.

Imperial NHS Trust covers North-West London; and includes Charing Cross, Hammersmith, Queen Charlotte’s & Chelsea, St Mary’s and Western Eye hospitals. It is one of the biggest acute trusts in the country, with more than one million patient contacts each year. It is not yet known which services will be affected by the cuts. However, they will add pressure to currently constrained services – the trust already has a backlog of orthopaedic and trauma cases. A spokesperson for the college was not available to comment on whether the cuts would have any impact on the quality of medical education offered to students across Imperial NHS trust.

The announcement adds to the problems troubling NHS London. As a result of tough ongoing negotiations, hospitals have become locked in arbitration, though so far Imperial has managed to avoid this fate. Last month, Iain Duncan Smith, former Conservative leader, delivered a petition to Downing Street opposing local hospital unit closures. The strategic plan for NHS London has been under review since the coalition government halted the previous Labour administration’s plans, which were largely based on recommendations drawn up by Imperial’s Lord Darzi.

The coalition government has currently put Andrew Lansley’s controversial Health and Social Care Bill on hold for a two-month ‘listening exercise’ following widespread criticism. This has been undermined by a leaked confidential memo from NHS chief executive, David Nicholson, published in the Guardian, which drew a red line beneath certain aspects of the bill that the government will not change. Labour opposition has slammed the ‘listening exercise’ as a PR stunt.

This month, the Royal College of Nursing passed an overwhelming vote of no confidence in the reforms after Lansley decided not to speak at its annual conference – the first health secretary not to do so in eight years. Lansley also failed to turn up to make a keynote speech at the launch of Imperial’s newly formed School of Public Health, in February.