Spending watchdogs today urge the government to step in and arrest the spiralling cost of clinical negligence claims to the NHS. Reporting on its nine-month analysis of claims spending, the National Audit Office (NAO) says ministers must take a stronger and more integrated approach.

The report finds no evidence that the rise in clinical negligence claims is related to declining standards of patient safety, but rather is closely associated with legal services reforms and market developments - in particular the migration of lawyers from personal injury to clinical negligence.

NHS Resolution, which provides indemnity cover for NHS trusts in England, appears to avoid serious criticism over the £1.6bn annual cost of claims. The blll is predicted to double to £3.2bn a year by 2020/21.

The NAO dismisses the idea that fixed recoverable costs for lower-level claims will make any significant difference, estimating that this will save just £90m a year by 2021. Instead the NAO seeks solutions outside the remit of the Department of Health, including changes to the legal market and addressing the increasing level of damages awarded for high-value claims.

The NAO wants health and justice ministers to form a strategy by next September to manage the growth in claims spending. This will address factors including the number of claims, legal costs and damages awarded.

NHS Resolution is urged to promote better data collection for enhanced insight into the causes of claims. The organisation is also encouraged to share data with the Solicitors Regulation Authority where it has achieved savings from contesting ‘unmerited or excessive claims and legal charges’.

NHS Resolution is noted as having taken action to contain the rising cost of clinical negligence claims by reducing the average cost per claim and keeping defence costs in line with general inflation. The authority has also challenged ‘excessive’ charges of claimants’ legal firms and levels of damages.

The average time to resolve cases has increased from 300 days in 2010/11 to 426 days last year. Again, NHS Resolution appears not to be held at fault, with the report stating it has ‘limited control’ over some barriers to resolving cases quicker, such as the time taken by the court to process cases.

In a statement, Meg Hillier, chair of the public accounts committee, said: ‘The Department of Health and Ministry of Justice have been too slow to work together to turn the tide, with actions to save £90m a year by 2020-21 a drop in the ocean in the face of forecast costs of £3.2 billion a year by 2021. We need government to take a good hard look at the financial and personal costs of clinical negligence.’

The report will disappointment claimant lawyers who were hoping that the NHS's behaviour as a defendant might be placed under greater scrutiny. James Bell, clinical negligence partner at London firm Hodge Jones & Allen said the NAO has ‘failed patients’, adding that the continued focus on claimant lawyers is ‘misguided and disproportionate’.