A health watchdog has launched an investigation into whether West Suffolk NHS Foundation Trust has breached its licence to provide healthcare for patients due to concerns about its financial performance.

The trust has said this was due to a number of factors, including an increase in the number of emergency admissions and delays in discharging patients after treatment at the hospital.

As part of the investigation, Monitor will work with the trust and other NHS bodies to understand the trust’s financial position and the local response. Monitor’s regional director for the Midlands and East of England, Adam Cayley, said: “We need to understand why West Suffolk NHS Foundation Trust’s financial position has deteriorated and be assured that our concerns about its financial performance are suitably addressed and do not impact on the trust delivering the care its patients deserve.”

Monitor had previously questioned the trust’s financial sustainability, while the West Suffolk Clinical Commissioning Group (CCG) had called its financial position “non-viable” unless changes could be made.

Stephen Graves, chief executive at West Suffolk Hospital, said: “Along with many other NHS trusts across the country, we have been experiencing financial challenges and ended 2013/14 with a £3.6m deficit because of the national tariff reduction and high levels of emergency activity.

“These financial challenges will remain and we forecast a loss of £8m in 2014/15. This is a worst case scenario and our recently published two-year plan, along with the work currently underway with PricewaterhouseCoopers, will improve the final outcome.

“As a result Monitor, our regulator, has decided to take a closer look at our finances so that they can understand the reasons behind our performance and the steps we are taking to improve the situation in the future.

“It is important to stress that Monitor have no other concerns and recognise that the quality of care we provide to our patients and our performance in all other areas remain strong.

“We will continue to work closely with Monitor to provide any assurances they request that our plans are aligned, where necessary, with West Suffolk CCG and together we can deliver the necessary improvements.”

This year, West Suffolk NHS Foundation Trust was shortlisted in the CHKS Top Hospitals Awards 2014 for the quality of care it provides for the fourth year running. The Trust won the award in 2011 and 2012.

West Suffolk was also named as Trust of the Year 2013 for the Midlands and East of England region as part of the publication of the annual Dr Foster Hospital Guide.