It is becoming clear that while trusts in London have succeeded in cutting costs during 2010-11, savings will fall significantly short of what was planned, meaning surplus targets will not be met.

Across the capital providers have so far made savings of £362m, or 4.6 per cent of turnover – but this remains 17 per cent below target. For primary care trusts, there is still a 14 per cent shortfall, despite £391.7m of savings, worth 2.8 per cent of total resources.

Unsurprisingly, NHS London puts much of the difficulty down to overperformance in the acute sector – a factor it notes is affecting “virtually all primary care trusts”.

For example, NHS Haringey’s board papers identified a contract with University College London Hospitals Foundation Trust as a key risk, with an overspend of £4.4m the worst case scenario.

With a projected deficit of £28m, it is one of eight PCTs unable to break even without support from the London Challenged Trust Board. The other seven are Barnet; Enfield; Harrow; Hounslow; Sutton and Merton; Waltham Forest; and Barking and Dagenham – which still looks set for a year end deficit, along with five trusts (see story, left).

But they are not the only ones who have struggled with acute sector contracts. NHS Tower Hamlets is expecting a £6m acute overspend – half of that total is with Barts and the London. The PCT has had to dip heavily into its reserves to deliver an end of year surplus – applying £3.5m of cash specifically identified for acute overspending, and a further £2.2m “uncommitted non-recurrent reserves”.

Across the region, surpluses have taken a hit. The forecast for the capital as a whole was a £274m surplus – £196m under target.