More than 90 per cent of Covid-19 tests for Redbridge residents are negative, councillors were told.
But 55 per cent of those who do test positive are not being successfully traced by the national system.
Just 6.7 per cent of the borough's Covid tests are coming back positive, according to Redbridge Council's corporate director of people Adrian Loades.
He told the people scrutiny committee on Monday, October 19, that the extent of Redbridge's coronavirus problem compared to other boroughs may be being overestimated due to greater “access and take up of testing”.
But he warned that the number of contacts not being traced and informed and therefore not isolating was "clearly a concern".
Read more: East London hospitals announced 21 Covid deaths last week
Mr Loades said: “I think we are seeing the impact of trying to operate a national system when you need a lot of local intelligence to trace people.
“Each local authority is expected to develop a local test and trace arrangement, where cases the national system is unable to trace are referred to them to follow up.”
Redbridge director of public health Glady Xavier said the council was “hopefully going to set up the local system in two weeks”, which means the percentage reached will “hopefully increase”.
Data from the Department for Health and Social care shows more than 1,000 Redbridge residents with Covid were transferred to the Test and Trace service between May 28 and October 7.
From these, 2,828 people were identified as having come into contact with those who tested positive in the last 48 hours but only 56.1 percent of these were reached by contact tracers.
Redbridge currently has the highest infection rate of any London borough and the number of new infections each day has surpassed the pandemic’s first wave.
In the last two weeks, the NHS trust which runs King George Hospital in Ilford and Queen’s Hospital in Romford has so far announced 21 deaths from the virus.
The borough’s third permanent Covid test centrewill open this week in Charteris Road Car Park.
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