NHS spending rises but productivity falls

NHS spending rises but productivity falls

The rise in NHS output has not kept pace with the increase in spending, according to the Office for National Statistics (ONS).

The ONS said NHS output rose by 3.8% a year from 1995 to 2006, but productivity fell by an average 1% a year.

Output by 2006 was 50% higher than in 1995 due to more patient treatments in hospitals, an increase in GP consultations and a large increase in drugs prescribed by GPs.

However, the ONS found that there was a larger increase in inputs, such as increases in the volume of labour and high growth in the volume of goods and services bought from outside the NHS.

Karen Dunnell, national statistician at the ONS, said: "The article published today shows that there has been a steady increase in services to patients, but since 2001 the rise in output has not kept pace with the rise in spending, after allowing for inflation."

The Conservatives accused the government of "squandering" NHS cash.

Shadow health secretary Andrew Lansley said: "Labour have invested lots and achieved too little. Falling productivity goes to the heart of Labour's financial mismanagement of our NHS."

30 January 2008 Breaking News: Heath Insurance Magazine.