Hundreds of residents packed a community hall in an impassioned bid to save a wing of Seaton Hospital at risk of being demolished.

They say the wing's construction was funded entirely by the community, and that they should therefore have the say about its future, rather than just the NHS.

Devon's Integrated Care Board (ICB), which because of its financial deficit is in special measures, pays a market rate of rent on the wing to government-owned NHS Property Services (NHSPS), and is considering handing it back to its landlord to save money.

However, campaigners fear that if that happens, the wing could be demolished.

Martin Shaw, a former county councillor who organised the meeting at Colyford Memorial Hall on Friday (3 November), attended by an estimated 250 people, said campaigners were "looking at all possible solutions to save the hospital [wing]" and to find a way to provide other services to complement the hospital's existing offering.

"We are now in a position where the NHS [in Devon] is looking to hand the building back, and there is the potential for the wing to be sold or demolished, which is why we are all here today."

Dr Mark Welland, chair of the Seaton & District Hospital League of Friends, said a major issue in his discussions with the Devon ICB and NHSPS related to the costs of rent.

"There have been several meetings between the League of Friends and the NHS in terms of securing some of the void space in Seaton Hospital, but in each discussion it seems to always come up against one seemingly unmoveable problem, which is the amount that NHSPS demands for renting the space."

Dr Welland said the NHS charges the Devon ICB roughly £200,000 per year for the space that is currently empty and where campaigners want additional services to go.

"We have a real opportunity with this void space to do good things," he added. "While the hospital continues to house NHS clinics, physiotherapy and community rehab and nursing services, there is an opportunity for the likes of the League of Friends and [community interest company] Re:store to put further services in."

He added that it had only been when the League of Friends recently approached NHS Property Services to secure space in the void area for the Seaton hospice-at-home service that the NHS disclosed there was a plan to lose it.

The meeting heard that a previous plan in 2019 created by Seaton Area Health Matters to buy the hospital outright and then rent space out at concessionary rates to local groups, had progressed well until a stumbling block prevented campaigners from securing funding. Shortly after, the pandemic started and the plans were shelved.

Paul Arnott, leader of East Devon District Council (Lib Dem, Coly Valley), said he couldn't make any promises on his own, but assured campaigners that the authority was keen to help.

"This issue has already been discussed and we have the capacity to take on Public Works Loans Board loans, so it may be that East Devon has a role to play," he said.

He said any potential financial help from the council would need to be agreed by councillors, but that it could form part of a financial package with other donors to save the hospital.

"We are a way from that yet, but East Devon District Council, as the closest body democratically that is able to do something financially about this situation, does stand ready to help, but any details have to be subject to confirmation."

Richard Foord MP (Lib Dem, Tiverton and Honiton), who raised the plight of Seaton Hospital at prime minister's questions last month, said the strength of feeling in the community showed how important the hospital is.

"The local community fundraised to pay for this hospital, with small donations from people, including those in this hall, contributing to it, and people don't feel they should be asked to pay twice to save it," he said.

"As such, we're calling on NHS Property Services to charge a concessionary rate to use this facility as a health hub for people in Seaton and the surrounding villages."

He added that Seaton Hospital was handed to NHS Property Services in 2016, and that that organisation's one shareholder – secretary of state for health Steve Barclay – could intervene.

"If the secretary of state wanted to, he could change [the rental rate] tomorrow and ensure Seaton Hospital is available for use by the local community," Mr Foord added.

Many residents hailed the care at Seaton Hospital, with community organisations such as hospital transport services suggesting that significant round-trips for many outpatients to the Royal Devon and Exeter Hospital in Exeter could be avoided if services at Seaton's expanded.

The meeting also heard that the average age in Seaton, and the prevalence of age-related diseases such as dementia, were higher than the national average, making the campaigners' plans for a health hub that would house additional services even more important.

Representatives from the Devon ICB and NHS Property Services were invited to the meeting, but didn't attend.

Mr Shaw asked for attendees to vote on creating a steering committee comprising the meeting's speakers, which included Mr Foord, Dr Welland, Cllr Arnott and other stakeholders, to pursue the matter.

This was supported, and Mr Shaw now hopes to lobby Devon County Council's health scrutiny committee later this month to support the Seaton Hospital campaign. Mr Foord is set to discuss the issue again in parliament later in the month too.

NHS Devon has previously said the site's high rent and other charges – which it said amounted to £300,000 a year – were a "poor use of taxpayers' money at a time when we are forecasting another budget deficit of more than £40 million this year."

"In recent months, we have been talking to local health, care and community partners to see if they are interested and financially able to take on the space, but no viable schemes have been received and we started the process of handing the ward space back to NHS Property Services (NHSPS) so we can save the money that is currently being wasted on it," a spokesperson said.

"We have always been very happy to talk to prospective occupants of the space if they have a financially viable scheme to take it on – and we remain so."