NHS faces 17.5bn payout bill after treatment bungles: One seventh of annual budget set aside following avalanche of claims

Daniel Martin


23:47 GMT, 10 April 2013



06:51 GMT, 11 April 2013

The NHS has been left with a multi-billion-pound bill after an avalanche of legal claims following medical blunders.

A total of 17.5billion – one seventh of the health service’s annual budget – has had to be set aside to pay compensation to thousands of people making clinical negligence claims.

A report by MPs revealed that this ‘shocking, scary’ total had surged by 11 per cent in just one year, and warned that the ‘inexorable rise’ may be spinning ‘out of control’.

Medical negligence cases are costing the NHS billions every year (posed by models)

Medical negligence cases are costing the NHS billions every year (posed by models)

The revelation comes just weeks after Health Secretary Jeremy Hunt announced plans to make it a criminal offence for hospitals to cover up mistakes.

Ministers blame a surge in cases brought by no-win no-fee lawyers for the spiralling costs, with others pointing the blame at so-called ‘claims farmers’ who prowl NHS hospitals urging patients to sue. About a third of the money paid out by the NHS in compensation goes straight into the pockets of lawyers – diverting cash from frontline patient care.

The figures are contained in a report on the Whole of Government Accounts by the powerful Commons public accounts committee.

MPs also revealed the full cost of Labour’s controversial PFI deals – at least 144.6billion, up 9 per cent on the total liability estimated last year.

111 staff are 'swamping hospitals'

111 staff are 'swamping hospitals'

Most of the clinical negligence bill is the result of NHS errors which have led to babies becoming brain damaged, with 100 cases occurring each year. Advances in medical science mean that these children live much longer, increasing their care bill. The report shows that in 2009/10, the NHS believed that clinical negligence claims would cost it 15.7billion in future years.

This is an actuarial calculation, based on the number of claims the NHS believes there is a very good chance of it not being able to defend, the severity of the claimed errors and how much a victim would be paid out for these mistakes. The figure includes an estimate of the cost of mistakes that have not yet been claimed for.

By 2010/11, the estimate had risen to
17.5billion. And MPs warned it could hit 18.9billion by 2011/12. The
report concluded: ‘The Treasury believed that this was largely due to
the rise in “no win, no fee” offers by the legal profession.’

Health Secretary Jeremy Hunt has announced plans to make it a criminal offence to cover up hospital mistakes

Health Secretary Jeremy Hunt has announced plans to make it a criminal offence to cover up hospital mistakes

Margaret Hodge, chairman of the public accounts committee, said: ‘These are shocking stats – absolutely shocking.

‘There seems to be an inexorable rise. This NHS stuff is big bucks – it seems totally out of control.
‘We have this shocking, scary data. It is a ridiculous waste of money and I do not know where it is going.’

Sharon White, director general of public services at the Treasury, told MPs that she hoped the totals would come down when new laws to clamp down on no-win no-fee claims come into force.

But Robert Oxley, campaign manager of the TaxPayers’ Alliance, said: ‘It’s deeply worrying for both patients and taxpayers that negligence costs have gone up so much.

‘This bill is a result of individual and collective failure within the health service and should not be tolerated. Keeping hospitals clean and safe through simple measures can save lives and taxpayers’ money.’

The report also shows that taxpayers have been left with a bill of 144.6billion for hospitals, schools, roads and other projects built under the Private Finance Initiative – far higher than estimated only a year before.

This is four times the value of the assets secured through the deals. Labour gave the green light to dozens of these deals because they enabled the expenditure to be kept off the Government’s books.