The government's spending on healthcare in Britain is rising nearly twice as fast as the amount of care provided, according to the Office of Health Economics (OHE).

In the annual Compendium of Health Statistics, the OHE says that spending on the NHS is rising at an annual rate of around seven per cent.

But "activity" rose at 3.8 per cent a year from 1999 to 2003, according to the Office for National Statistics.

The OHE, a body supported by the drug industry, said that the NHS should start measuring the health benefits to patients, as BUPA already does.