A DIRE financial warning has been issued by the chairman of Ardgowan Hospice.

Keith McKellar, who is chairman of the board of trustees, has delivered a stark review of the charity's financial performance over the last 12 months in the annual accounts following a £284,000 loss - and warned that the current situation is 'quite simply not sustainable'.

Mr McKellar says the figure is a 'significant improvement' on a projected deficit of £426k but insists that the shortfall 'cannot continue'.

More losses, totalling over £200,000, are predicted in each of the next two years - all of which are being paid for using cash reserves.

The chairman said: "The hospice has been struggling financially for some time now.

"We have reported financial deficits over a number of years, a position that is quite simply not sustainable."

The latest financial results are for the year up to March 31 and management say the hospice is now heading in the right direction and they expect it to return to a surplus in by 2020.

A two-year recovery plan is in place but officials say it will not impact on services or staff.

Mr McKellar said: "It is critical that we return to a balanced budget as soon as possible.

"Whilst the board hoped that we would be able to do this within the next 12 months, it has become apparent that we would not be able to achieve this without a severe reduction to existing services and we feel that this would be a disservice to the people of Inverclyde and our hard working and dedicated staff."

It takes around £3 million a year to run the hospice, which provides end of life and palliative care to people in Inverclyde for free.

Around 60 per cent of its income is reliant on donations.

In the last year, volunteers put in over 69,000 hours and staff delivered clinical care to 925 patients, including 1,025 home visits.

Mr McKellar says it is not unusual for an organisation like the hospice to run at a loss and reassured people that major improvements have been made.

He said: "The board of trustees and the senior management team, are committed to improving the financial health of the hospice and to delivering the highest quality care to the people of Inverclyde.

"Many non-profit organisations in the UK report running with an operational deficit from one year to the next.

"Ardgowan Hospice is not uncommon in this respect, however, such a position is clearly not sustainable and steps are being taken to address this.

"The board has approved a budget that will see the hospice return to a surplus position in 2019/20.

"The current financial position is already significantly improved in comparison to last year and progress continues to be made to improve the financial health of the organisation.

"The hospice remains committed to increasing income and reducing costs without compromising patient and family care."

Bosses add that the financial problems will not affect their plans to build a new hospice on the site of their current Access Centre facility and the former church next door.

The chairman also praised the public and businesses for their continued support.

Mr McKellar said: "Ardgowan Hospice exists to serve the people of Inverclyde and hospice care is free to all patients and families.

"We simply couldn't do what we do without the continued support of the Inverclyde community and we are immensely grateful for this."