A hospice has announced it needs to save £1.5m and cut 40 jobs in order to secure its future.

The chief executive of St Catherine’s Hospice, which operates in West Sussex and Surrey, said funding of the sector needed an urgent root and branch review.

Giles Tomsett said the government’s contribution covered 23% of running costs and that over 10 years it had not kept up with inflation.

The Department of Health said the new government had inherited huge challenges but ministers were “determined to shift more healthcare out of hospitals” into the community.

Mr Tomsett said increases in the cost of living had also affected donors’ ability to give.

The 40 clinical jobs at risk, including nurses, are expected to impact community services where staff visit patients at their home, though in-patient bed numbers at its Pease Pottage hospice will not be reduced at this stage.

Mr Tomsett described the decision as “heartbreaking”.

He said “We’ve made significant reductions to our support teams, reduced the hours of our community telephone advice line and changed the way our therapy team operates.”

Currently, the hospice has more than 230 staff.

It was revealed last week that five hospices in the UK had confirmed or were planning cuts, including one in the West Midlands where a reduction of 40 jobs and some in patient beds was announced.

Hospice UK, which represents the sector, said no other area of the health system would tolerate service cuts and redundancies on this scale and warned that further announcements by other charities were likely.

The Department of Health and Social Care said it wanted everyone to have access to “high-quality end of life care”.

It said: “Hospices provide vital, compassionate care for people facing the end of their lives, and invaluable support to their families.

“This government is determined to shift more healthcare out of hospitals and into the community, to ensure patients and their families receive personalised care in the most appropriate setting.”

Toby Porter, chief executive of Hospice UK, said: “Hospices are ideally placed to alleviate the huge strain the NHS is under.

“It is counterproductive in the extreme to allow their services to be cut back in this way.”