The fall has occurred even allowing for improvements in the quality of care, the Office for National Statistics says. Without those, the fall would have been faster still, representing a decline of 2.5 per cent a year on average between 2001 and 2005.

From 2005 to 2006, as the immediate effects of big pay rises for doctors began to fall out of the calculations and growth in staff numbers slowed, productivity fell less quickly, by just 0.2 per cent. It is possible that quality adjustment for that year, when the figures are available, will show a small rise in productivity.

Measuring NHS productivity involves “approximations to a complex reality”, the ONS admits. But on the available measures, since 1995, just before Labour took power, and up to 2006, there was a 50 per cent increase in the quantity of care that the NHS provided in terms of operations, GP consultations, prescribing and so on.

Over the same period, however, inputs – chiefly money and staff – rose even faster, up by 67 per cent. Consequently productivity fell by about 10 per cent.

More detailed analysis shows productivity remained broadly stable between 1995 and 2001, but fell by an average of 2.5 per cent a year to 2005, with the decrease slowing sharply in 2006.

However, these figures do not allow for quality improvements, such as whether patients are getting better quicker. The ONS concedes “we may be underestimating quality improvement”, and further work on quality measures is needed.

Alternative assumptions might reduce the estimate of the decline in productivity by up to 0.5 per cent a year, the ONS says. Big falls in death rates from diseases where medical interventions make a difference may suggest bigger quality improvements than so far estimated.

“But none of these uncertainties are sufficiently great to alter the conclusion that productivity has fallen, particularly in the period 2001 to 2005,” the organisation concludes.

David Nicholson, NHS chief executive, has acknowledged that improving productivity in the next few years is crucial as spending growth tightens.

But he said the ONS approach “would count longer appointments with GPs and switching patients from hospital outpatients into more appropriate community settings as a fall in productivity, rather than an improvement in quality”.

http://www.ft.com/cms/s/0/a3644ffe-cec0-11dc-877a-000077b07658.html