Neonatal services provide care to babies born prematurely or with an illness or condition which requires specialist care. Over the last 20 years, neonatal services have undergone substantial organisational and technological changes whilst remaining a challenging and innovative area of medicine. Following a 2003 review of neonatal services, the 180 neonatal units based in the English National Health Service and Foundation Trusts were organised into 23 geographical, managed clinical networks.[1] Demand for neonatal care has risen year on year. In 200-07, around 60,000 babies (roughly one in ten births) were admitted to neonatal units, at a cost to the NHS of some £420 million.

Whilst there was widespread support for neonatal services to be delivered through clinical networks, these networks have developed at different rates and two areas have yet to establish a formal managed network. Networks have helped improve communication and co-ordination between units and have made progress in reducing the number of times babies have to be transferred long distance to obtain the necessary level of care, but there has been less progress on a key review recommendation for networks to re-designate units to ensure that the supply of intensive, intermediate and special care matches demand.

The NHS still has limited data on patient outcomes, other than mortality rates which show unexplained variations between networks. While these variations may be due to the demographics of the population covered by the network, such as high and low maternal age, obesity and smoking, other factors, such as access to care during pregnancy and speed of access to the right level of neonatal care, may also have an influence.

Constraints in capacity mean that the Department of Health (the Department) is still struggling to meet the demand for neonatal services, and problems over recruiting, retaining and training the staff required to deliver the service remains a major challenge. Financial management at the unit level needs to be improved. Neonatal units have a poor understanding of the costs of running their unit and there are differences in how units' determine their charge for a cot day with wide variations in charges between similar types of unit.

On the basis of a Report by the Comptroller and Auditor General (C&AG),[2] we examined the quality and effectiveness of neonatal services in caring for these most vulnerable members of our society. We looked at the ability of the system to meet increased demand for neonatal services, the benefits of networking neonatal units, recruitment and training of staff and the impact on health inequalities. We took evidence from witnesses from the Department of Health and the NHS.