The proportion of patients in England spending more than four hours in A&E has increased by over a quarter in the last year, reaching its highest level since 2004, The King's Fund has reported.

A&E waiting times increased sharply in the last two quarters of 2011-12, despite Prime Minister David Cameron's pledge last June that they would remain low, says the Fund, in its latest quarterly monitoring report on NHS performance. 

At national level, A&E waits still remain within the government's target range that no more than 5% of patients should wait more than four hours, but 48 NHS providers breached this threshold, compared to 18 in the second quarter. This reflects growing pressures on the hospital sector and coincides with emerging evidence of increases in "trolley waits" as some hospitals struggle to find beds for patients.

The Fund's report also finds that 40% of NHS organisations failed to meet productivity targets in 2011-12, based on the findings of an expanded survey of 60 NHS finance directors. This will be a significant concern, as last year was the first of the four-year spending squeeze during which the NHS needs to find £20 billion in productivity improvements.

This quarter's report looks back at how the NHS performed during the first year of the spending squeeze, and shows that it is performing well against a number of key indicators:

- waiting times for hospital treatment are stable, with the proportion of inpatients waiting more than 18 weeks falling over the last 12 months, while outpatient waits remain static;

- C difficile and MRSA infections in hospitals fell 33% and 14% respectively during 2011-12, continuing the downward trend of recent years; and

- the proportion of patients waiting more that six weeks for diagnostic tests fell to its lowest level since the last General Election.

The Fund's survey of NHS finance directors indicates that the NHS has ended 2011-12 in a healthy financial position, with just four forecasting a deficit in their organisation, in line with national figures estimating a surplus of £1.5 billion across the NHS as a whole. However, it says that this masks significant financial challenges in some areas, with recent figures showing that 31 hospitals received bail-out finding of £414 million in 2011-12, an increase on previous years.

The main findings of the Fund's survey of finance directors are that:

- nearly half (28) said their organisations met their cost improvement targets in 2011-12, with two-fifths (23) failing to meet their targets and one-tenth (seven) exceeding them;

- more than half (32) were pessimistic about the financial prospects for their health economy over the next year, with less than a quarter (14) optimistic about this: and

- 35 said their organisations plan to reduce staff numbers, with the 28 which were able to quantify their plans identifying nearly 4,200 job losses. If replicated across the NHS, this would add up to the biggest fall in staff numbers in more than decade, says the Fund.

"Overall, the NHS continues to perform well, despite the spending squeeze. However, this masks growing pressures in hospitals and significant performance issues in some NHS organisations," says John Appleby, chief economist at The King's Fund.

"Given the strength of the political commitment to keep waiting times low, the steep rise in A&E waits will be a concern for the government. The productivity challenge will only get harder, so evidence that large numbers of NHS organisations failed to meet their productivity targets last year does not bode well," he adds.