27 January 2012 Last updated at 15:39 ET

Sandwell and West Birmingham Hospitals NHS Trust to save £125m

The trust's chief executive John Alder says targets will be "challenging"

A West Midlands health trust has announced it will have to save £125m over the next five years.

Sandwell and West Birmingham Hospitals NHS Trust, which is making the cuts, runs the Birmingham City, Rowley Regis and Sandwell General hospitals.

Trust chief executive John Adler called the savings targets "extremely challenging".

One consultant spoke of their "shock" at the announcement made at a meeting on Thursday.

Mr Alder added: "I think it would be stupid and naive to suggest that this is not a very tough agenda.

"The situation we're facing and the scale of savings required is the same across the whole of the hospital sector in the NHS and it's all part of the £20bn savings which I think everybody is familiar with that the NHS is required to make."

A statement from the trust read: "The majority of the £125m the trust has to save over the next five years is due to a national efficiency requirement which is the same for every hospital trust in the country. This works out as 4.8% of our total budget in 2012/13.

"A small amount (1.3% of our overall budget in 2012/13) is related to more patients being treated by primary care services in future, avoiding the need to come into hospital.

"An even smaller amount (0.6% of our overall budget in 2012/13) will help us build the new Midland Metropolitan Hospital we are planning in Smethwick, which will provide state-of-the-art facilities and the latest technologies to treat patients."

'Very severe cutting'

The statement added that the "next few years will be extremely challenging".

It is understood that £23m will come out of staff costs but only a third of the cost savings have been identified and staff fear that more than 800 jobs could go.

Dr Ken Taylor, a consultant who works at City Hospital and who was at the extraordinary general meeting, said there was disbelief among his colleagues when they heard all the facts.

"I think it was probably shock last night at the enormity of the situation that they face," he said.

"You can't make cuts like that and still have effective, intact, services.

"This is not just minor cuts or efficiency savings. This is very severe cutting and really not compatible if you were running a business with the survival of the business in its present form."