A London health authority, six primary care groups and two hospitals have been forced to draw up a recovery plan to cope with deficits and a loss of funding totalling £20m.

The plan, requested by the NHS Executive’s London regional office, is being co-ordinated by Merton, Sutton and Wandsworth HA.

It says the ‘local health economy’ has lost£14.6m in non-recurrent funding from other parts of the NHS, while trying to deal with an accumulated deficit of£4.9m.

A leaked copy of the plan says ‘reliance’ on funding from a variety of central and regional sources for eight hospital and community projects has to end.

Over the next three years, trust deficits of£2.5m at St George’s Healthcare trust,£2m at Epsom and St Helier trust and£1m at local community and mental health trusts must be wiped out.

Six PCGs have contributed a£500,000 planned underspend to help deal with the problem. But St George’s Hospital and St Helier Hospital each face the closure of one elective and one acute ward.

Merton, Sutton and Wandsworth chief executive Sue Gallagher said a number of ‘collaborative saving schemes’ were being devised to tackle the problem, and stressed that ‘none were designed to reduce the level of patient care’.

‘NHS partners are working together to develop plans to improve services at a time of financial difficulty.

‘Once these plans are agreed, they will be shared. There are no plans for emergency beds to close this winter.

‘In future there would only be a reduction in some beds if replacement services were available to meet the needs of the local community, ’ she said.

But Geoff Martin, campaigns director of pressure group London Health Emergency, said too many decisions were being made without public consultation.