A councillor has accused the NHS of “stealing” money from south Essex after it was revealed the region’s health authorities will need to pick up the bill for a failing neighbour.

The Mid and South Essex Sustainability and Transformation Partnership (STP) is set to hand millions of pounds over to a struggling health authority that represents Cambridge and Peterborough.

The bail out is set to cause serious delays to key healthcare initiatives, including a vital mental health service that was due to be introduced in Thurrock.

In total the STP will pay £5million to Cambridge and Peterborough in order to help make up the £142million needed to address their budget deficit.

That money will be taken from each of the clinical commissioning groups (CCGs) that are responsible for healthcare in south Essex.

In Thurrock, it means taking £480,000 and delaying a landmark mental health transformation scheme that was set to bring significant support to the tens of thousands of residents thought to be living with a mental illness.

Councillor James Halden, who is responsible for health at Thurrock Council, said: “Every local authority has a statutory, legal, binding obligation to balance their budget. The NHS is far looser on their rules.

“The result here is a large deficit in one part of the nation that gets paid for by stealing money from South Essex. This is the consequence of generations of politicians and commentators putting the NHS on such a pedestal where we only ever demand more cash without correct financial responsibility.

“One would hope that this would serve as an example to the central and senior NHS machine that they need to be reined in, told to focus less on their permanent restructure, and return to basics by getting their house in good fiscal order.”

Councillor Victoria Holloway, who chairs Thurrock’s Health Overview and Scrutiny Committee, said she was “livid” about the news.

“This is absolutely shocking no other institution would say you’ve overspent so we’ll give you money from another area which does balance their budget and does what it is told by living within its means - what kind of precedent does this set," she said.

"You can't just take the amount of money out and it not have an impact."

She added that Thurrock CCG and Healthwatch Thurrock had warned her of the implications the loss of funding will have on the mental health strategy and she expects further details to be revealed in September.

Jackie Doyle-Price MP for Thurrock and Under Secretary of State for Mental Health, Inequalities and Suicide Prevention, was contacted for comment but did not respond.

The call for local health authorities to bail out a neighbour has attracted fierce criticism from council members but NHS England says it is part of “joined-up” working.

The regional director for NHS England and NHS Improvement in East of England, Ann Radmore, said: “We are committed to a joined-up NHS across the East of England that provides high quality care for patients, within its financial allocation.

“When a particular system is experiencing difficulties, we will look at how we can tackle the issues together as a region, to ensure a sustainable NHS across the whole of the East of England.”

Caroline Rassell, senior responsible officer for Locality Health and Care in the Mid and South Essex Sustainability and Transformation Partnership (STP), said: “The core responsibility for the local NHS is to give our residents high quality healthcare, but we must also offer them the best value for the NHS pound.

“Financial positions have previously been rebalanced at a national level but this is now the responsibility of regional NHS teams.

“The East of England region is experiencing particular financial challenges and one of our neighbouring STPs, Cambridgeshire and Peterborough, is struggling to meet their financial target of containing their deficit to £142m.

“The five other STPs in the East of England including Mid and South Essex have been asked to improve their own financial performance by about £5m to offset that.

“Within Mid and South Essex STP, the improvement target is split between the NHS providers and clinical commissioning groups, with the target divided proportionately between partners.”