Wes Streeting wants to redirect more money towards frontline patient care in the NHS. The Secretary of State recently said to NHS Providers, “I want to reassure you that our investment is not simply pouring more water into a leaky bucket. We're plugging the holes, cutting out the waste and rebuilding our National Health Service.”

He was talking about bureaucracy but there is a far greater drain on NHS resources which governments of every stripe have allowed to continue on their watch.

At £60 billion, estimated liability for clinical negligence is the second largest provision on the government balance sheet after nuclear decommissioning. And as the National Audit Office (NAO) revealed in October, this staggering sum is growing exponentially as claims costs increase – quadrupling since 2006/07.

This isn't because healthcare professionals have become more negligent. As the NAO recognises, the trend in claims volumes has been relatively stable in recent years, despite the growing demands on the NHS and the introduction of new indemnity schemes for GPs.

Instead, the rising clinical negligence costs since 2016/17 which hit £3.1 billion in 2024/25 are “almost entirely due to increasing compensation for damages”.

As to what's driving up costs, the NAO says damages for high-value claims are the biggest factor, including lifetime funding for care and future lost earnings. Only 2% of claims resulted in settlements of more than £1 million (typically obstetric cases involving brain damage) but these accounted for 68% of total costs reported by NHS Resolution for 2024/25 (it was 59% in 2006/7).

Another driver is inflation in claimant legal costs, which increased by £390 million in real terms since 2006/7, while NHS legal costs rose by a fifth of that sum (£83 million). This is a particular issue in low-value claims of under £25,000 (the majority of cases), where claimant legal costs make up 54% of the total paid out, compared with 25% for NHS costs and 21% for claimants' compensation.

However, the NAO notes this disproportionality is creeping into medium-sized claims too. In the MDU's experience, claimant legal costs can be many times bigger than compensation awards. In one GP case, for example, the claimant received £6,000 but their solicitors received £70,000.

The Public Accounts Committee (PAC), which scrutinises government spending, is currently investigating clinical negligence costs for the second time in a decade. In 2017 it recommended “urgent and coordinated action to address the rising costs of clinical negligence.” But the fact that the PAC has found it necessary to return to this issue speaks volumes and committee members subjected government and NHS witnesses to a grilling at the latest public evidence session on 20 November.

Our priorities for reform

The MDU has long campaigned for concerted action to address the unsustainable rise in clinical negligence costs. Of course, patients who have been negligently harmed must be compensated, but we must also address the distortions and inequities of the current system in the interests of the health service and taxpayers.

While there's no simple solution, we have set out the following three priorities that would redress the balance:

The government is committed to increasing NHS funding to £226 billion in 2028/29, up 3% on average in real terms but our failing clinical negligence system continues to cost the NHS millions. This simply doesn't make sense if the government's strategy is to maximise the money available for frontline care.

In our submission to the PAC and our open letter to the Chancellor, Rachel Reeves, the MDU set out reforms which we believe will make the system fairer and sustainable. We are encouraged by the growing volume of calls for change - now we need the government to transmit words into action.