NHS compensation: pay outs more than double in less than a decade hitting record of nearly £3bn

EMBARGO: 22.30 Monday 17th February

• The NHS paid out a record £2.8 billion in compensation last year - over 140% higher than 2014/15’s figure of £1.2bn
• 41% of all compensation pay outs are related to maternity care equating to a staggering £1.15 billion
• The Trusts with the highest pay outs have been revealed with some paying close to £100 million in 2023/24 alone
• Liberal Democrats said the figures were “the price that patients have paid for years of neglect” and called on the government to “stop dithering on reforms”

The NHS paid out a record £2.8 billion in compensation last year, up from £1.2 billion less than a decade ago, research by the House of Commons Library commissioned by the Liberal Democrats has revealed.

Of this £2.8 billion, a shocking 41% of compensation payouts related to maternity care, equating to £1.15 billion. 

Some individual Trusts paid out staggering sums in the last year. Barts Health NHS Trust paid out £94.5 million in compensation, Mid and South Essex NHS Trust, £65 million and Manchester University NHS Trust, £61 million. 

126 of 201 (63%) NHS Trusts and bodies who recorded full data had seen an increase in the number of compensation payments they had made. Of those, 72 (36%) saw the amount they had paid out rising by at least half on 2020/21’s figure, the first year that Trust specific data was reported. 

Alongside showing a staggering rise in the NHS compensation bill, the data also revealed a significant rise in the number of new claims being made compared with 2014/15, from 11,497 to 13,784 last year, a jump of 20%. It means that more than one claim every hour was made last year. 

Some Trusts and bodies have seen significant rises in the number of claims that have been made. At Salford Royal NHS Trusts there has been a near three-fold rise since 2020/21 from 63 to 229. 

In total, 99 of the 187 (53%) NHS Trusts and bodies have seen a rise in the number of compensation claims with 62 (33%) seeing them rise by at least a fifth since 2020/21.

The NHS has previously paid out compensation for horrific ordeals. A baby girl suffered catastrophic injuries at Stockport NHS Foundation Trust, which paid out £30 million last year. The court found that the girl had sustained life changing injuries in the form of cerebral palsy due to a series of negligent omissions in her postnatal care and delays in performing surgery.

The Liberal Democrats said that the figures laid bare “the price that patients are paying after years of neglect” and called on the government to “stop embracing the false economy of dither and delay” by completing the social care review within a year and fully implementing the actions recommended by the Ockenden report into maternity care.

Liberal Democrat Hospitals and Primary Care spokesperson, Jess Brown-Fuller MP said:

“These figures expose the true cost of years of neglect under the previous Conservative government. Each payout represents the horrific trauma endured by too many patients, who are forced to navigate an NHS that has been run into the ground.

“The Conservative Party should hang its head in shame but the new government’s approach to rescuing our NHS currently resembles nothing more than kicking the can down the road.

“From new hospitals to social and maternity care, Ministers need to stop embracing the false economy of dither and delay and finally start delivering on our NHS.

“That is why we need to see them complete their social care review within the next twelve months and implement the full actions from the Ockenden report immediately. Patients cannot afford the government to drag its feet any longer.”

ENDS

Notes to Editors:

Source: NHS Resolution, Annual Statistics, supplementary statistics, tables 2, 4, and 6

Source: NHS Resolution, Annual Report Statistics 2023/24, Tables A&C

Breakdown by Trust can be found here (amounts) and here (claims).

Maternity compensation data can be found here (page 72). 

Reporting on the Stockport NHS Foundation Trust £30 million compensation pay out can be found here.

NHS Resolution’s annual statistics publication contains the number and amounts of payments made by NHS Resolution by financial year.

Notes from the Library:

It is not possible to say what the reason for these payments was, but NHS Resolution is primarily concerned with settling clinical negligence claims. NHS Resolution is the national NHS body for England which defends clinical negligence claims and pays compensation to injured patients. Although NHS Trusts do not have to participate in NHS Resolution’s schemes, of which the Clinical Negligence Scheme for Trusts (CNST) is the largest, all NHS Trusts are members. The CNST covers all clinical negligence claims against NHS bodies for incidents occurring on or after 1 April 1995.

The first table shows the amount paid out by NHS Resolution each year since 2014/15 broken down by the type of cost incurred. Please note that while the cost in nominal terms has increased, the spend as a percentage of the NHS budget has remained relatively stable over this period, averaging around 1.2% and ranging from 0.9% in 2014/15 to 1.5% in 2017/18 and 2018/19. 

Please also note that these sums reflect the year the payment and not the year the claim was made. For instance, there were more new claims in 2021/22 (15,078) than in 2023/24 (13,784), but the total cost of negligence payments was higher last year than in 2021/22. There is an average of 3 years in between the incident and the date that the claim is notified to NHS Resolution and a further 1.5 years between notification and settlement. Hence, payments can be related to incidents that happened several years before.

Negligence payments and claims in England

As mentioned previously, settled claims will most likely relate to claims that were notified in previous years and incidents that happened several years prior. As you can see from the second table, the number of settled claims has increased since 2014/15 by around 28% from 10,493 to 13,382 in 2023/24. Over the same period, the number of finished consultant episodes (FCEs) increased by around 15%. (The Library has used FCEs as a measure of NHS activity. This is not a perfect measure of service use or need but gives an indication for comparison.)

Please note that not all settled claims have resulted in damages payments. While 13,382 claims were settled in 2023/24, only 6,899 – or 52% – resulted in damages paid.

The second table also contains the number of claims notified each year. In 2023/24, the number of claims notified to NHS Resolution was 13,784. This was an increase of around 20% from 11,497 in 2014/15. 2021/22 saw the highest number of claims since the start of the time series in 2006/07 with over 15,000 claims. Claims are notified on average around 3 years after the incident. This means that claims notified in 2023/24 are most likely not related to incidents in the same year.

The second table shows that the number of claims between 2014/15 and 2019/20 largely remained stable with minor fluctuations and started to increase year-on-year since then.

Negligence claims by trust

The number of negligence payments or the number of settled claims is not available by trust. A breakdown of negligence claims by notification year and by trust is possible from 2020/21 onwards.

Please note that over these four years some trusts have merged, and others may not have existed for the duration of the whole period and will thus be missing some data. In many instances, the number of claims in a year for an individual trust was smaller than five but larger than zero. Due to data protection laws, this means that these values are suppressed and thus missing. In addition, trusts vary substantially in activity and catchment population.

For instance, while Manchester University NHS Foundation Trust had the highest number of overall claims over the last four years, this is likely to be an artefact of the Trust having one of the largest catchment populations in England. However, it is not possible to adjust these values for catchment population, because up to date catchment figures are not publicly available. Nor would data on Finished Consultant Episodes be a sufficient measure of overall activity to attempt to adjust the figures by.