Barts Health Trust in east London heading for biggest budget overspend in the history of the NHS

Trust is expected to run up a budget deficit of £134.9m - beating the record it set last year by 69 per cent

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The biggest hospital trust in the country is set to run up the largest deficit in the history of the NHS. 

Barts Health NHS Trust - which runs four hospitals in east London - is expected to overspend its budget by £134.9m this year. 

The trust - which employs 15,000 people and serves an area containing 2.5 million - is set to surpass its previous record overspend of £79.6m in 2014-15 by 69 per cent. 

Its perilous financial situation was revealed in a written parliamentary answer by the health minister, Alistair Burt, to Sadiq Khan MP, Labour’s candidate for London Mayor. 

Mr Burst also revealed another London trust, London North West Healthcare NHS Trust - which is also in charge of four hospitals - is due to end the financial year on 31st March with a £88.3m hole in its budget. This is up from a £24.9m deficit last year.

Professor Chris Ham, chief executive of the independent health thinktank, the King’s Fund told the Guardian: “These forecast deficits provide further evidence of the escalating financial crisis in the NHS, as well as the longstanding challenges facing London’s health system. 

“In the case of Barts, these pressures have been exacerbated by the costs of a major PFI development.”

Records presented at a board meeting last week show that the trust uses approximately 10 per cent of its monthly £68m wage bill to pay agency staff. 

The trust calculated that £30m of the £80m annual bill for non permanent staff went on the staffing premiums charged by the agencies. 

The trust was also given a £56m fine last year by local NHS organisations for failing to treat A&E patients within four hours and those waiting for planned care within 18 weeks. 

Prof Ham said the £1.8bn of extra funding Health Secretary Jeremy Hunt has promised the NHS in England to wipe out collective overspend by its healthcare trusts may not be enough to plug the gap. 

He said: “The extra funding provided by the government is being used mainly to get the NHS back into financial balance but even this must be in doubt given the scale of the deficits now being reported. 2016/17 will be a make-or-break year for the NHS.”

Alwen Williams, the chief executive of Barts, said the deficit only represented 10 per cent of its annual budget as the largest trust in the country and it is in no worse financial health in relative terms than any other acute trust.