Bradford Teaching Hospitals NHS Foundation Trust will end the financial year £2.9 million in the red.

Most of the deficit - £2 million - relates to costs involved in shedding 27 administrative jobs at the trust's headquarters.

The remaining £900,000 relates to two items which will not recur in next year's budget.

The trust - which manages Bradford Royal Infirmary and St Luke's Hospital - last December embarked on a programme of voluntary early retirement and voluntary redundancies in a bid to save £1 million from its salaries budget for headquarters and non-clinical departments.

This has now been completed without the need for any compulsory redundancies and the trust said no front-line staff such as doctors or nurses had been affected by the scheme.

The job losses will create savings of £1.34 million which the trust has promised to plough back into patient care. Trust chief executive Miles Scott said he was pleased the programme had reached its target entirely through voluntary means and stressed the trust was operating on target according to its income and expenditure.

He said: "Now the scheme is complete we can build on its success by reinvesting these savings into front-line hospital services.

"It also paves the way for us to introduce new management arrangements to ensure that we have an efficient and effective support structure in place to take our hospitals into a new era of care.

"This will see doctors having a greater role in the running of our hospitals.

"We are determined to explore other ways of generating more efficiencies if this means that we can free up more money to invest in the development of services - whether this is buying new equipment, improving facilities or recruiting extra doctors."

The non-recurring expenses which make up £900,000 of the overspend are two items: a contingent liability for the year ending 2004/05, which is cash set aside for unknown eventualities, and the revaluation of a new MRI and CT building.

A spokesman for Monitor, the independent regulator of Foundation Trusts, said: "We have been monitoring the progress and performance of Bradford since we intervened at the end of 2004.

"Overall we are extremely satisfied in the measures taken by the trust in addressing the issues it faces."

Monitor intervened in Bradford as the organisation's financial position deteriorated just months after being awarded Foundation Trust status in April 2004.

At one point a £22 million deficit was forecast. The regulator appointed external advisers and removed the chairman in December 2004.

Last month Monitor chairman Bill Moyes visited Bradford to meet hospital directors and governors to satisfy himself the trust was back on track.