North East London NHS facing budget deficit of almost £37million.

Havering health body struggles under significant financial pressures.

Local democracy reporter Sebastian Mann today writes:

NHS North East London (NEL) is facing a budget deficit of almost £37million as “very significant financial pressures” continue to weigh on the health body.

Pressure on “high-cost” mental health services and increases in prices have all contributed to its £36.9m deficit, NEL says.  

NHS NEL is an integrated care board (ICB) covering more than two-million people across the capital. Its serves the boroughs of Barking and Dagenham, Hackney, Havering, Newham, Redbridge, Tower Hamlets and Waltham Forest. 

In a report put before Havering Council on Tuesday night (16th April), chief finance officer Henry Black said it faced substantial challenges going forward, having previously described last year as “probably the most challenging” for NHS finances since 2020. 

Writing in February, he said there was still a “significant underlying financial deficit” – despite approving £82m of cuts, referred to as efficiencies, in June 2023. 

The £36.9m overspend can be broken down into an agreed £25m deficit and a further £11.9m in unfunded costs born out of strike action between 23rd December and 24th February.

For 2023/24, the ICB had a budget of £252m. On top of commissioning GPs and monitoring services, it is also undertaking several large-scale projects. 

The board is currently planning the total redevelopment of Whipps Cross Hospital in Leytonstone and the construction of St Georges wellbeing hub in Hornchurch, which is expected to be finished this year.

Developing the new Whipps Cross Hospital, as part of the national hospital scheme, in 2024/25 was priced at £13.7m. The main construction work is scheduled for 2025, with a view to opening the new centre by 2030. 

Individual healthcare trusts under the NHS NEL umbrella were also reporting a year-to-date deficit of £61.7m in February. 

They likewise pointed to the effects of strike action on their finances, as well as inflation, issues with paying staff and agency workers, and delays in implementing “cost improvement plans”. 

Integrated care boards (ICB) have been told they will need to break even by March 2025, but officials say this will be “enormously challenging”. 

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