Barbara-Anne Walker, chief executive of Ashgate Hospice, said consultations had begun on reducing its number of inpatient beds and reshaping services and team structures.

Walker said: ‘Despite record-breaking fundraising and the extraordinary support of our community, the gap between what the NHS pays us and the true cost of care has become too big to fill. Our reserves are running critically low. Without action now, Ashgate's future would be at risk.'

Earlier this month, sector leaders warned ‘time is running out', with 12,000 terminally ill patients at risk of cuts to their care.

On 15 October, the DHSC announced children's and young people's hospices in England will receive £80m over the next three years following an earlier £100m investment.

Amanda Sullivan, chief executive of NHS Derby and Derbyshire ICB, said: ‘We greatly value the work of the hospice sector and we are sorry to learn from Ashgate Hospice about their proposals to cut services.

‘We believe the level of funding we provide to Ashgate Hospice is fair when compared with benchmarks for the hospice sector nationally and it is also in line with NHS England guidance.

‘Our core contract value with Ashgate Hospice has increased in value by 55% since 2022/23. The request for a multi-million pound increase in funding during this financial year is especially difficult and at a time when the whole health system is under extreme financial pressure, and when no additional services would be provided.

‘We have been working with the Ashgate team over several months to understand why their costs have risen so significantly this financial year. We have offered to support Ashgate in reviewing the way care is provided for the North Derbyshire community, working in partnership with health, social care and the voluntary sector.

‘We will now work with Ashgate and the rest of the health and care system to mitigate the impact of these proposals.'