People with learning difficulties have been left in "limbo" in one of the last remaining long-stay hospitals four months after it was due to close.
A source close to Orchard Hill hospital in Sutton, Surrey, has raised concerns over a “lack of momentum” in moving 93 people with severe and profound needs into the community.
Orchard Hill missed the government's deadline for closure of all long-stay hospitals in 2004 and again in April this year.
"The trust have spectacularly failed to meet the deadlines and it's scandalous that people have been left in an ongoing limbo," the source said.
Sutton and Merton Primary Care Trust, which runs the hospital, said funding problems had caused some of the delay.
It said the NHS Bank, which offers grants and loans to NHS organisations, had refused to give additional financial support to assist the closure of Orchard Hill.
It estimates that it needs £15m to close Orchard Hill, but was only given just over £1m last year from South West London Strategic Health Authority. It is now exploring "alternative approaches".
The trust said the closure had also been delayed by two legal challenges from parents against the initial decision in 2000 to close the hospital made by the then Merton, Sutton and Wandsworth Health Authority.
The parents argued that the decision was flawed but their case was withdrawn following an agreement last year.