Health service productivity shows long-term decline

The data, from the Office for National Statistics (ONS), found a mismatch between inputs and outputs, leading to an annual productivity fall of 0.3 per cent on average.

This means there was a drop in the amount of NHS activity for every pound spent on publicly funded healthcare, mainly the NHS.

Inputs refer to the volume of goods and services, including clinical supplies, and spend on staff including nurses, doctors and support workers. Healthcare inputs grew by 75 per cent, averaging 4.4 per cent growth a year, the ONS data showed.

But healthcare output grew by just 69 per cent overall, averaging 4.1 per cent growth a year.

From 1995 to 2001, productivity was broadly stable as output and inputs grew at a similar pace, the ONS said.

But from 2001 to 2008 productivity declined as inputs grew more quickly than outputs every year except 2005 and 2006.

Productivity in 2008 is estimated to have fallen by 0.7 per cent,

compared with a fall of 0.3 per cent in 2007.

Health Minister Mike O'Brien said: "In 1997, the NHS was severely understaffed and underfunded.

"We have had to address this understaffing and that has affected productivity.

"We can now deliver the shortest waiting times in the history of the NHS and a major reduction in death rates and health care associated infections, whilst improving quality and seeing and treating more patients than ever.

"According to ONS figures, from 1997 to 2008, NHS output has increased by 63 per cent.

"Over the same period NHS inputs increased by 67 per cent. Most economists and HM Treasury accept it is difficult to grow capacity and productivity at the same time, yet the NHS maintained virtually flat productivity (-0.3 per cent per annum) over the longest period of sustained growth in its history."

Liberal Democrat health spokesman Norman Lamb said: "This is yet further evidence that you cannot simply throw money at the NHS and expect it to be used well. Labour has failed to implement the type of reforms necessary to ensure that the NHS runs efficiently.

"Many people will be concerned by today's figures. We need a new

approach to the NHS."