The bit I have the problem with is the pale almost white part between the bare receeded part and the still healthy part. The very bottom of the bit you have circled.
The fleshy part of the coral isn't touching anything but I will reconsider it's position if this may be irritating it.
The cleaner shrimp hate it and won't go near it but I have a tiny bristle worm living in the receeded bare area which I have been trying to get rid of for over a week. Little ******* knows I'm after him.
Thanks for your help. I am considering taking it back for the LFS
where I bought it as it's definanttely not a happy coral.