Additionally, the hospice has faced a £200,000 bill in non-pay costs such as energy bills, leaving the charity with a financial black hole.
The hospice, which marked its 40th anniversary this year, is now struggling to make ends meet.
As a result, an as yet undisclosed number of staff will be made redundant.
It comes as the hospice said only eight of the 18 beds it offers are now in use due to the funding pressures.
Mark Jarman-Howe, chief executive of St Helena Hospice, said: “We have been very open about the challenges that we face at St Helena and we’re very grateful to the continuing support of the Gazette and the local community.
“As a result of those challenges, we have been working on securing our future. We developed a plan with trustees over several months to ensure that we had a stable and secure future for our hospice services across north east Essex.
“In recent months we have been consulting with teams within the hospice on those plans and we are in the process of concluding that consultation.
St Helena boss Mark Jarman-Howe is appealing for help on behalf of the charity (Image: St Helena Hospice)
“We expect there to be a small number of redundancies, some of which will be voluntary along with a smaller number of compulsory redundancies.
“We very much regret this and are sorry to have to say goodbye to any of our valued and dedicated colleagues, but sadly we are in a position where we need to address the underlying issues of funding and increased financial pressures.
“As a result of these changes, we are close to being in a position where we are more confident about our future, and we do believe we have done enough to secure our future for the next few years whilst we see how conversations around national funding continue to play out.”
Mr Jarman-Howe said he wanted to reassure the public the Hospice in the Home team continues to be provided in people’s own place of residence across north east Essex, including 24/7 support from SinglePoint.
Due to the financial difficulties, the hospice has been forced to leave ten out of the 18 beds empty for the foreseeable future.
These beds have been offered to the NHS, Mr Jarman-Howe confirmed, which has “chosen not to fund” them.
“Instead, we are exploring opportunities for using those beds in a positive way to support the future of hospice care and to meet local needs,” he said.
“We are continuing to grow our private respite care service for patients in a stable condition who need a period of respite away from their normal living situation.
“Another of the plans we’ve been working on is our new specialist palliative care virtual ward, offering the equivalent of eight inpatient beds, and we’re optimistic about the potential to grow that service in the future.
“We will share further details of our new service model once our internal engagement is complete. In the meantime, please keep supporting us. We need you now as much as ever.”
St Helena organises a number of events and challenges to raise funds throughout the year, including the upcoming Community Fun Day in Mile End on August 2, a Half Marathon in Harwich on 7th September and the popular Midnight Walk in Colchester on September 27.
Colchester Council leader David King said: “I will share the concerns of many residents about a much loved institution such as St Helena Hospice being in difficult times.
“We have always had a close relationship between the hospice and the council, and will be talking to them about the challenges and supporting them with our health partners.
“We need the hospice in good health, financially, in order to provide its invaluable end of life care.
“I’m deeply sorry to hear of the loss of jobs and the risk of compulsory redundancies. This will be difficult for the dedicated staff and the institution.
“I hope this can be done in the best possible way and for those people to find fresh employment in the care sector as soon as possible.”