Labour has warned that the Government has “completely lost control” of the NHS’ finances as a report from a leading think tank forecast a deficit of £2.3bn this year.

The study by the independent King’s Fund showed NHS national bodies are facing steep controls on spending to to reduce the NHS’ deficit to £1.8 billion.

Caps on agency staff spending have resulted in 22 per cent of trusts being concerned this will impact on their ability to recruit the staff they need.

It also said more than half of trust directors and 48 per cent of senior finance managers at clinical commissioning groups said quality of care has worsened in the past year.

Heidi Alexander, Labour’s shadow health secretary said: “These findings are further proof that the Tories have completely lost control of the NHS’s finances.

“The Government’s cuts to nurse training places have forced hospitals to drain resources hiring expensive agency staff. This has left hospital deficits soaring and could lead the Department of Health to blow its budget for the year.

“Despite the scale of the cash crisis in the health service, Ministers are determined hospitals make eye-watering ‘efficiency savings’ which experts – and now NHS bosses – say cannot be delivered without putting patient care at risk.

“Jeremy Hunt needs to come clean with the public about the scale of the financial crisis in the NHS and what it means for patient care.”

This comes after weeks of pressure on Hunt following the strongly critcised imposition of new contracts upon junior doctors which inspired two rounds of industrial action. On the day of the announcement, the amount of doctors applying to work abroad rose by over 1,000 per cent.