NHS nightmare turns to reality as funds vanish

Everyone recognised how ambitious the Government's task was when it vowed, on 27 July 2000, to save the NHS. Tony Blair promised thousands more doctors, nurses and hospital beds in the NHS plan, and the Chancellor, Gordon Brown, backed it with the biggest sustained increase in funding in the 50-year history of the service, averaging 6.1 per cent real growth a year to 2004.

Less than 18 months later, the nightmare that must have haunted the Prime Minister and the Secretary of State for Health, Alan Milburn, looks as if it may be coming true. The spectacular sums invested in the health service appear to have been swallowed without any progress being made against the rising tide of demand.

Mr Blair pledged at the launch of the plan to make the NHS "once again the envy of the world". Central to that was the promise to cut waiting times to six months or less for operations and three months for out-patients by 2005. An even more ambitious target of a maximum three-month wait for operations was set for 2008.

Health experts estimate that to meet those targets, activity – the number of routine patients treated – must grow by at least 5 per cent a year. But the latest figures show no sustained increase over the past four years and for the four quarters up to June this year hospital activity fell. Waiting lists, which reached a low point last spring, have risen in each of the past five months.

The figures only relate to routine "elective" work. If emergency work is rising it can delay routine work because doctors and nurses are busy and beds are full. But the latest evidence, according to the Kings Fund, is that emergency work, too, may be falling.

Despite the failure to increase activity levels, Labour cut 100,000 people from the waiting lists in its first term. Health policy analysts say that was achieved by massaging figures and cherry picking lists for those needing simple procedures who could be treated quickly – prompting protests from doctors that the system was "distorting clinical priorities".

Tony Harrison, a senior research fellow at the Kings Fund, said: "The huge spurt in getting waiting lists down during the first term was phoney. That waiting lists went down by more than activity went up would seem to me to be a really bad sign."

Managers have complained that much of the record sums going into the NHS have been for central projects such as NHS Direct, the telephone helpline, and cancer and heart tsars to lead crusades to improve treatment. That has meant less money for extra beds and nurses to treat patients.

The productivity of doctors is also falling because of cuts in junior doctors' hours and increased demands for audits and extra training – all of which improve care but take time away from treating patients.

Mike Harley, a senior research fellow at the Health Services Management Centre of the University of Birmingham, said: "They have got to have no one waiting more than 12 months by next March to have any hope of achieving their targets and they are not anywhere near that."

Sean Boyle, a health policy expert at the London School of Economics, said: "It must be worrying for the Health Secretary that the extra money is not having any effect."