The NHS’s deputy chief executive has used his latest quarterly report to direct the health service to “robustly bear down” on “persistent poor performer” organisations.

In language stronger than that usually used in the report, David Flory writes: “[This] report, as well as highlighting performance successes, also highlights a number of organisations which are failing to deliver against expectations. I expect the NHS to robustly bear down on this poor performance.”

He adds: “This is especially important at this time of transition and I expect all steps, including financial penalties and other contractual sanctions, to be applied where required.”

The report states that all the service’s key performance indicators were maintained or improved in the three months to 31 December. The surplus forecast for strategic health authorities and primary care trusts in 2011-12 has also increased, to £1.5bn, up from £1.2bn at the end of the second quarter.

The service reported quality, innovation, productivity and prevention savings of £3.9bn for the year to date, and forecast £5.8bn savings for the full year.

However, the forecast surplus for non-foundation trust providers – which was already the lowest it has been for a number of years – saw a further slight decline.

The gross deficit forecast by the eight NHS trusts now expecting to finish 2011-12 in the red is now £190m, just £30m lower than the surpluses forecast by the remaining 104 non-FTs. Six trusts were forecasting the same deficit they had predicted in the previous quarter. Imperial College Healthcare Trust in London cut its forecast loss from £35m to £19m but Mid Yorkshire Hospitals Trust joined the group for the first time this year, forecasting a deficit of £20m.

Mr Flory told HSJ: “We need those people who can’t deliver the right set of services within their budget to improve. It’s not sustainable for people like [Barking, Havering and Redbridge University Hospitals Trust] and South London [Healthcare Trust] to carry on as they are. But the overall picture is certainly as strong as it’s been in my time in this job.”

The two London trusts are respectively forecasting deficits of £65m and £50m for the year.

“Can they ever get back to where they need to be?” Mr Flory added. “I think it’s too soon to be able to answer that question. But they’re going to need to do something radically different.”