A government watchdog will launch an investigation into why Oxford Health NHS Foundation Trust lost £3.7 million in the last financial year.
Health regulator Monitor has concerns that the trust is making fewer savings than planned.
Oxford Health are responsible for providing physical, mental health and social care to elderly and other vulnerable people in Banbury, Oxford and the wider north Oxfordshire area.
However, the trust has responded, saying it is currently in the process of forming long term plans to make the necessary savings.
A spokesperson for Oxford Health NHS Foundation Trust, said: “Because we are, relatively speaking, a very efficient NHS provider we are further down the road in identifying additional opportunities for improving efficiency. We have therefore set ourselves a cost improvement programme target to deliver £5.1m of savings in the year ahead rather than the £11m that national targets would suggest.
“We recognise how hard our staff are working to meet the needs of a growing population, with more people living longer and with more complex needs; and over the last year we have had a productive discussions with our commissioners about the funding of our services in light of this.”
Paul Streat, Monitor’s Regional Director, said: “Oxford Health lost money last year and the losses look set to continue.
“We know the trust has already been working hard to save money, but to date it hasn’t been enough to return the trust to a healthy financial position. We want to know what more it could be doing to be more efficient, and how local healthcare organisations could help it to improve its finances.
“Our priority will be helping the trust to improve its financial position so it can continue to provide quality care to its patients.”
No decision has been made by Monitor on whether action will be needed. Monitor will announce the outcome of its investigation once it is completed.
Oxford Health, based in Headington, was ranked the 16th most efficient NHS trust out of all 244 in England in the 2014 NHS Reference Costs Index.