Hospices are facing a huge cash shortfall because of a rising staff bill which is putting services at risk, a charity has warned.

Hospice UK said the Government must provide cash urgently after its analysis showed hospices will need £120 million to match upcoming pay rises in the NHS.

Most of hospice expenditure (71%) is spent on staff, with hospices recruiting from the same pool of staff as the health service, Hospice UK told the PA news agency.

This means they must try to match NHS salaries to attract and retain nurses, healthcare assistants, physiotherapists and other workers.

At present, hospices do not receive funding to match NHS pay and are forced to try to raise extra cash from local communities.

However, Hospice UK said rising costs, such as energy and food prices, together with squeezed donations as people cope with an increased cost of living, mean hospices are currently budgeting for a total deficit of £186 million this year.

Toby Porter, chief executive of Hospice UK, said: “Hospices are a critical part of the health and care system, providing care and support to 300,000 people a year across the UK.

“But right now rising staff and energy costs are stretching their finances to the extreme. Nearly all hospices are budgeting for a loss this year.

“Hospices are committed to paying their brilliant staff a fair wage, but without proper Government support, they will need to try and find the funds to do so through the income they raise from charity shops, marathon runs and bake sales.

“It is just not realistic to expect them to do so at a time when the cost-of-living crisis is affecting their supporters.

“We are asking for the Government to recognise this by finding a way to support hospices to keep pace with NHS pay rises this year and next.

“If they fail to do so, services will inevitably be cut.”

Data suggests that adult hospices have to raise around two-thirds of their income from charitable fundraising, while the figure for children’s hospices is four-fifths.

Trevor Johnson, chief executive at Acorns Children’s Hospice in Birmingham, said: “Hospices like Acorns are essential partners in the healthcare system, providing services that help ease pressure on the NHS and a level of love, care and support that many families cannot find anywhere else.

“However, like all employers, Acorns is facing a higher salary cost for the year in order to keep pace with the NHS and wider employment market and to attract and retain the specialist roles we need to be able to support the families who depend on us.

“These rising costs present a huge challenge and outstrip our ability to raise money through fundraising or income from our charity shops, as unlike most businesses we cannot pass our rising costs on to the consumer.

“The situation is comparable to the Covid crisis – during which the Government stepped in to offer a lifeline to vital services like Acorns.

“Similar action is needed now for the sector.”

Rhona Baillie, chief executive of the Prince and Princess of Wales Hospice in Glasgow, said it was experiencing challenges in attracting suitable qualified clinical staff.

“With the increase in NHS salaries, we have no option but to match these salaries or face losing even more staff,” she said.

“Without statutory funding to match the NHS salary increase, we are in the position of having to fundraise even more money from the public to bridge the gap to ensure we are able to continue caring for our patients.”

Irene McKie, chief executive of the Strathcarron Hospice in the Forth Valley, said: “Our highly specialised Hospice at Home service supports over 400 people a week, the same amount as our inpatient unit.

“Yet lack of funding means we have been unable to expand the service the way we want, despite government moves to allow more people to choose to die at home and the huge pressure it removes from the NHS, at a time when hospitals are struggling to find beds.

“We need to raise around £102,000 a week to keep all our hospice services operating at the current level with the same amount of staff.

“We face £1.1 million additional running costs this year alone, due to two years of pay rises and high inflation. To further reduce our costs, we would have to cut or reduce services.

“It’s incredibly frustrating.”

Jack Wood, director of income generation at Ashgate Hospice in Chesterfield, added: “The challenges facing hospices across the UK are deeply concerning.

“Here at Ashgate Hospice we face the stark reality that we need to raise £25,000 from our local community every single day in order to provide our care.

“We know that over 2,400 people in North Derbyshire will need our vital end-of-life care this year, and that need is only going to grow in the coming years.

“The sharp rise in living expenses, exacerbated by the current economic climate, further adds to our financial burden.

“With the number of patients needing our services projected to rise, our current funding levels will make it impossible to meet this growing demand.”

The Department of Health and Social Care has been contacted for comment.