DUDLEY'S hospital trust has halved its deficit and is on course to balance the books next year, its chief executive has told the News.

The Dudley Group NHS Foundation Trust, which runs Russells Hall Hospital in Dudley as well as the Corbett and Guest Outpatient Centres in Stourbridge and Dudley, was £6.4m in the red last year.

But after making stringent efforts to get a grip on their finances - trust bosses are now predicting a shortfall of £3.5m for 2015/16 and they say they are on course to get back to into the black the following year.

Paula Clark, trust chief executive, said a combination of not filling vacant positions, voluntary redundancies and redeployment of staff had helped to ease budget pressures and had reduced the workforce by more than 200. She said: "We did really well taking out vacant posts, voluntary redundancies and redeployment; just 15 actually left under compulsory redundancy.

"We've been working hard to get ourselves into financial balance. We're still in deficit but a much smaller £3.5m this year but the following year we should be back in financial balance."

She said the formation of a new Black Country Alliance with Sandwell and West Birmingham Hospitals NHS Trust and Walsall Healthcare NHS Trust would play a key part in helping to drive down costs, preserve jobs and keep specialist care and skills in the region

She said Alliance would be able to save money by sharing back office functions and on purchasing items and she added: "Were stronger together - we can protect more jobs. By working together we're able to pool risk.

"It's about controlling the costs - and the alliance will help with things like procurement.

"Another reason is to learn from one another to drive up standards - it's about being a first class organisation in the Black Country. By networking we'll share skills and expertise.

"But we will remain an independent organisation inside the alliance and it will be for each of us to determine staffing levels in each organisation.

"We're trying to make sure we have really good services in each organisation - the idea is that we strengthen services we've got."

Stourbridge MP Margot James said she thought there was "a case for consolidation" but she wouldn't want the new alliance to see the Dudley Group "dragged down" by the other trusts - as Walsall missed its A and E targets earlier this year and Sandwell Trust has also been battling a large deficit.