The £1.2bn turnover Barts Health Trust has recorded a £15.7m in-year deficit, and has serious concern about making required cost savings in 2013-14.

The £15.7m year-to-date deficit reported for the end of May represents 8 per cent of its income for April and May.

Its July finance board paper shows the trust struggled to identify and achieve cost improvement programmes in April and May.

The paper states: “In month two [May] the trust is reporting a £15.7m deficit, which is mainly attributable to under delivery of CIPs together with underperformance of income. A poor start was expected but this is significantly worse.

“The planned year end surplus of £1.1m is predicated on delivery of a £77.5m CIP programme.”

In the year to date its CIP target was £12.9m, but only £3.8m had been achieved.

The £77.5m savings requirement represents 6.3 per cent of income, which is smaller than several other trusts for 2013-14.

The paper says: “The trust is currently £29m short of the annual [CIP] target. The trust is also required to ensure delivery of £20m of improved control actions to address unbudgeted expenditure levels in 2012-13.”

It says the board has “taken escalating action to review the CIP delivery on a weekly basis”.

The paper said the largest financial pressure had come from overspending on “high cost treatment in areas such as cancer services” and in outpatients, while income was £5.6m below target due to reductions in elective and outpatient activity, and “likely impact of penalties and challenges”.

Minutes of the trust’s May board meeting show it had only identified £47m of its £77m require cost improvement savings.

Barts Health Trust was formed from a merger of Barts and the London, Whipps Cross University Hospital and Newham University Hospital trusts in April last year.

The May minutes state: “The chief executive confirmed that there would be a major focus on corporate departments, including reviewing the current staffing position compared to the workforce reduction plans in the merger full business case.”

At the beginning of May the trust reported that, “subject to audit, the trust had achieved a financial surplus of £1.5m” for 2012-13, but that “the cost improvement programme had been under achieved by £14m”.

The combined 2011-12 end of year position for the three merged trusts was a £7.6m surplus.

An email from the trust’s chief executive Peter Morris to staff, seen by the Guardian, said: “We are in the business of providing high-quality safe care and just like all businesses, whether in the public or private sector, we need to be a financially stable organisation. Currently we are not.”