With plans to slash £9 million from the NHS budget in the Cotswolds over the next six months, you might think that Stroud General Hospital will be treating fewer patients than before.

But getting more patients to stay in Stroud for treatment may actually improve the hospital's financial situation. Alli Pyrah talks to staff at one of Stroud's most historic and best loved institutions.

The panel:

Richard Waldon, a GP at Rowcroft Surgery who works in the hospital's endoscopy department, Richard James, chief executive of Cotswold and Vale Primary Care Trust (PCT) and Barbara Ruthers, matron/manager for Cirencester, Stroud and Berkeley hospitals.

Who runs the hospital?

Cotswold and Vale PCT is the organisation responsible for providing health care in this area. It manages the budget and sets priorities, in accordance with directives from the Government and the Strategic Health Authority for Avon, Gloucestershire and Wiltshire, which runs the NHS in the region.

Most of the outpatient clinics at Stroud Hospital are run by consultants. Stroud GPs can refer patients to the hospital, and some, such as Dr Waldon, also work in specialist departments there.

Mrs Ruthers said: "Essentially, the nurses do a lot of the work, so we can use our medical cover more effectively across the hospital and patients don't have to wait so long.

"Alongside that we have the out of hours service for evenings and weekends, manned by GPs. We are the only PCT in the county that completely runs on local people. The rest all rely on agencies outside the county."

Who are the patients?

Stroud General Hospital is a community hospital and therefore does not have a major A&E. Instead, there is a 24-hour minor injury unit (MIU). The MIU would not care for major trauma, such as those with serious injuries from a motorway accident, or acute medical conditions.

However, only two per cent of all admissions in Gloucestershire are major trauma cases and the majority of patients who are admitted to SGH are treated there.

The hospital doesn't treat children under 16 as inpatients, though it does treat children in the MIU and as outpatients. Dr Waldon said: "A typical patient is usually elderly. They would have something we feel is comparatively easily treated. We hope to have them sorted out within a week, usually."

Mr James added: "We will take anything initially, but sometimes we can only do the immediate first aid then transfer the patient on. Our main bread and butter is the minor injuries. We treat what we can and what we can't we transfer on to the most appropriate service."

What are its strengths?

The hospital has a strong reputation for aftercare, such as rehabilitation, physiotherapy and home care services. Mr James said: "The hospital's growing. It's improved its clinical services over the last 12 months.

"You don't have to wait long for treatment at Stroud and we are probably among the best in the country for that. If you're admitted, there's a significant medical presence. The food's good here too."

Mrs Ruthers said: "It's clean and infection rates are very low. And also, on the whole, most of the outpatient clinics are run by consultants. If you go to Gloucester you may see a junior doctor so patients in Stroud are very lucky.

"It's very rare that a patient has to wait more than an hour, and they're usually seen in 15 minutes. You can wait more than four hours in Gloucester.

How are the community involved in the running of the hospital?

The people of Stroud have always been heavily involved in the work of the hospital. Even the building itself was donated by the community. The League of Friends of Stroud Hospital is an organisation run by Stroud residents, whose activities include fund-raising.

Dr Waldon said: "The League of Friends is a very supportive organisation which contributes vast sums of money to the hospital. As a result, we have some very good equipment, including some of the most up-to-date endoscopes.

"A lot of residents, especially older people, have a real affection for Stroud Hospital. They know where it is, it's relatively easy to park and you don't have to walk miles to find the outpatient clinic.

"Given the choice, when we have a bed in Stroud patients say they'd prefer to stay with us as opposed to being transferred to Gloucester."

What is the hospital's current financial situation?

The NHS strategic health authority for Avon, Gloucestershire and Wiltshire has been ordered by the Government to save £178 million before March 31 next year, and is still £25 million short of targets.

The knock-on effect is that the Cotswold and Vale PCT has to save £9 million. Mr James said: "We started our life as an organisation with a debt of about £5 million.

"We have had to fund a lot of additional costs for which there was no funding. So that has stopped us paying off the debt. The other problem is that this part of the world is considered more affluent, so inner city areas have tended to benefit more from the funding system. It's the same system as with education."

Dr Waldon said: "Part of the problem is that this area has inherited a debt, and I have not had a satisfactory explanation as to why."

Mrs Ruthers said: "There's been so many changes in the NHS over the last 20 years that the finances have never really caught up. The debt hasn't gone down but it hasn't gone up - and there's more people going into hospital and receiving care, so we must be doing something right."

How is the hospital funded and where does the money go?

Hospitals get money from the Government for every patient treated. If fewer patients are being treated, the hospital receives less money but some costs, such as heating and lighting, remain the same. If patients are sent on to another hospital, Stroud Hospital has to pay that organisation.

Mrs Ruthers said: "Essentially, the PCT gets money from the Government to look after the people who live within its borders. So the more we can keep locally, the more we can pay ourselves - which is cheaper - and the more we can invest in services.

"But if people need to go into the general hospital, we don't put them in here to save money. It's about appropriate treatment."

Mr James said: "Effectively a patient who turns up at Gloucestershire would pay a fee of £60-£70. If they come here and use us, that money is available for their local hospital. So there's a real incentive for people to use their local hospital."

Dr Waldon said: "There's a big problem in how you manage changes in income. The private sector say, we do that all the time, so you should be able to. But the difference is, we have got to maintain a wide range of services. We can't say we can't afford to do X-rays anymore.

"The difficulty is that the Government wants patients to have choice, but wants that choice to be cash limited. The most difficult thing is looking after somebody who is very elderly and has several chronic diseases.

"No private company is going to take them on - they are going to fall back on the NHS."

Mrs Ruthers said: "I think it's about maintaining a quality of life - and that's pretty precious to most people."