NHS productivity has improved, with the growth in the quality and volume of treatment now exceeding the increase in NHS funding.

Figures due to be published by the Office for National Statistics later this month will show that between 2003-04 to 2007-08 productivity growth was at worst static and at best grew by as much as 1.6 per cent a year. The greatest improvement was between 2004 and 2006.

Report authors Professor Andrew Street and Padraic Ward attribute the improvement in productivity to a “levelling off” in NHS staff numbers, a reduced reliance on agency staff and improvements in care quality and the numbers treated.

The previous set of figures showed NHS productivity declined 2 per cent a year between 2001-02 to 2004-05. They led to the Conservative party claiming the government’s investment in the NHS had bloated bureaucracy at the expense of frontline staff.

But the new figures show the number of full time staff employed by the NHS grew by 4.8 per cent a year between 2003-04 and 2004-05 but slowed to less than 0.7 per cent between 2005-06 to 2007-08.

Spending on agency staff fell by 22 per cent between 2005-06 and 2006-07 to £1.2bn and by 2007-08 was still below the cash level it was in 2005-06, despite an increase in the fees demanded by agencies. This suggested there had been “concerted efforts to reduce reliance on agency staff”, the report said.

As part of the study, the researchers examined NHS organisations’ total spending on different categories of staff. The greatest expenditure was on nursing staff at NHS hospital and ambulance trusts (excluding foundation trusts), comprising £7.3bn – 36 per cent of total trust spending on staff. It also revealed the total pay for chairs and non-executive directors across the NHS was £129m in 2007-08; 0.4 per cent of the total £36bn pay bill.

NHS Confederation policy director Nigel Edwards said: “This isn’t cause for complacency. Just matching growth of inputs to outs isn’t good enough for the situation we are likely to be in soon. We are back at the baseline where what we put in is what we get out.”