FINANCE: The capital’s trusts are likely to miss their savings targets due to slipping cost improvement plans and overperformance in the acute sector, NHS London has said.

Papers for the strategic health authority’s March board meeting show many trusts have achieved significant savings under the quality, innovation, productivity and prevention. But across the region there remains a shortfall of 17 per cent among providers, despite savings of £362m, or 4.6 per cent of turnover.

For primary care trusts, there is a 14 per cent shortfall, despite £391.7m of savings, worth 2.8 per cent of resources.

“In many organisations, weak underlying positions and a historic over-reliance on non-recurrent financial measures are also apparent in their lack of resilience in this context”, the papers say.

At the end of January, the forecast outturn position for London as a whole was a £274m surplus – £196m under target.

The SHA’s own forecast outturn surplus of £184m is £145m below target.

The new PCT cluster arrangements will incur costs of £133m, NHS London calculate, but these are expected to be recovered through reduced administration costs.

“The year to date position of trusts and PCTs continues to be dominated by activity levels significantly in excess of plan, and difficulties in delivering the unprecedented level of cost improvement factored into the plan,” the papers say.

They say some trusts have slipped on cost improvement plans, and have incurred “premium costs” for unplanned activity.

Eight trusts are significantly behind plan. These include Barking Havering and Redbridge NHS University Hospitals NHS Trust, who are £12.9m off-target, owing to slippage on CIP, overperformance, and restructuring costs.

Newham University Hospital NHS Trust is £8.4 behind plan, mainly because it has been unable to implement its transformation scheme fully this year, while St George’s Healthcare Trust is £8.2m behind.

Overperformance on secondary care contracts affect “virtually all PCTs”, NHS London says. Eight PCTS have been unable to break even without support from the London Challenged Trust Board.

These are: Barnet; Enfield; Haringey; Harrow; Hounslow; Sutton and Merton; Waltham Forest; and Barking and Dagenham.

“In reviewing cluster plans for 2011-12 the robustness of recovery plans for these boroughs is receiving the highest level of scrutiny and challenge to ensure that underlying balance is achieved next year or, in exceptional cases where this is not feasible, ahead of the formal transfer of commissioning from clusters to GP consortia in April 2013,” the SHA papers say.