Official figures compiled by the Office for National Statistics show that the amount of treatment the NHS delivers is lagging behind the pace of increase in the service's budget.
Critics said the statistics showed the NHS had absorbed huge amounts of money with very little to show for it and the Government must reform its management instead of pumping in ever more funding.
NHS productivity fell by 2.0 per cent a year between 2001 and 2005, according to the Centre for the Measurement of Government Activity, the ONS unit that monitors public spending. That was the period of the biggest funding increase in NHS history.
From 2005 to 2006, productivity fell less quickly, by 0.2 per cent.
From 1995 to 2006, the NHS annual budget more than doubled from £39 billion to £89.7 billion.