Hospital bosses are hoping their trust could be taken out of financial special measures next year after they achieved a £70m turnaround in their fortunes.

University Hospitals of North Midlands (UNHM) NHS Trust, which runs Royal Stoke and Stafford's County Hospital, was placed in financial special measures in 2017 in a bid to tackle its deficit problem.

The status led to the trust losing out on £28m funding, bosses said in 2019, and it was also hit with £19 million in extra charges and lost income.

The trust ended the 2018/19 financial year with a £63.607m deficit.

But for 2019/20 it was given a target of reducing the funding hole to £32m – and offered £32m if it met that challenge.

The trust went on to exceed break even target – and record a surplus at the end of the last financial year.

The transformation of financial fortunes was described by board chairman David Wakefield as "one of the best turnarounds I have seen".

Now the trust is looking to break even once more this year- despite the challenges of responding to the Coronavirus pandemic – and the prospect of being taken out of financial special measures is being seen as a possibility.

Mark Oldham, UHNM's chief finance officer, speaking at the trust's annual meeting which was held virtually on Wednesday (September 16), said: "Although the financial environment for the NHS in general remains challenging, the trust's plan for 2020/21 is to deliver a break-even position.

"Having delivered significant improvements in the financial position we are confident that exiting financial special measures next year is a realistic ambition."

He described the 2019/20 financial performance as "a significant improvement on the previous years' performance".

He added: "We are delighted to confirm this challenging target was not only met, but exceeded with a surplus of £5.2m for the year. We also received an additional £1.1m to support the costs of responding to the Covid pandemic.

"The trust had agreed a plan to continue to live within our means in 2020/21 and continue to break even, after receiving £13.5m of sustainability funding and cost improvement plan of £37.5m. The trust has been able to access this funding as it has been able to sign up to its control total.

"However, the impact of Covid has been significant and the existing financial arrangements have been suspended, with new arrangements yet to be finalised.

"In the interim, UHNM are being funded for costs incurred and therefore continue to expect to break even for this year."

UHNM saw its revenue increase from £713.8m in 2018/19 to £840.6m in 2019/20.

This improvement followed improved contracting arrangements with commissioners and reduced fines and penalties.

Previously the trust had been locked in a dispute with Stoke-on-Trent and North Staffordshire Clinical Commissioning Groups (CCGs) after it failed to hit a number of targets – and an "expert determinator" was brought in to make a ruling.

There was a £17m decrease in the trust's total asset value however, and costs increased from £764.6m to £826.6m.

The trust also invested more than £26m in medical equipment, systems and estates during 2019/20.