In a statement to the Observer in response to speculation that there are plans to close Tenby Cottage Hospital in advance of the new hospital being completed, a spokesman for Pembrokeshire and Derwen NHS Trust said: "It is a matter of record that the health community in Pembrokeshire has an agreed funding shortfall of £2.4m, having already made efficiency savings of almost £3m.

"In this context, the health community, together with key stakeholders, in the Service and Financial Futures (SaFF) Group, is looking at a number of options to save £2.4m permanently. In some cases, these are likely to result in service reduction. The services proposed for the new Tenby Resource Centre and in-patient provision at Park House Court do not feature in this debate.

"All of the above options were considered by the SaFF Group on August 12. No final decisions were made at that meeting, as some recommendations will require further consultation and therefore will not release savings this financial year.

"The SaFF Group also discussed a number of temporary contingency plans to save money this year. All options were considered in the light of our commitment to achieve our agreed targets with WAG. It is recognised that any measures we take will inevitably curtail activity in a number of areas, but clearly we are working hard to avoid risks to patients. The sort of options under debate include a critical review of all vacancies, potential bed closures across several service areas and potential reduction of operating theatre sessions.

"It is a matter of record that the possibility of closing the beds at the current Cottage Hospital, in advance of the move to Park House Court, was discussed at the SaFF Group, as a potential short term contingency.

"Also on the list of 15 options was the potential to reduce the 24-hour MIU facility to 16 hours in advance of the move to the Resource Centre.

"No other Tenby service change was considered. No firm decisions were made at that meeting.

"It is very important to remember that our responsibilities extend to the provision of mental health and learning disabilities services in Carmarthenshire and Ceredigion, as well as Pembrokeshire. All of our services are under scrutiny in our attempt to find cost savings this year."