Licence fees collected by fertility regulator from clinics could fund 1,000 free treatment cycles

Britain's fertility regulator has run up a surplus of more than £3m from charges imposed on the clinics it licenses, enough to provide 1,000 free cycles of IVF treatment on the NHS.

The unspent funds raised by the Human Fertilisation and Embryology Authority (HFEA) mean hundreds of NHS patients cannot get the treatment they need to help them have a baby.

The authority charges a £75 fee on every IVF treatment, which is paid either by the patient, if they are treated privately, or by the clinic if they are being treated on the NHS. If the charges had been waived for NHS clinics, more patients could have been treated.

The HFEA licenses 132 clinics, which pay an average of £36,000 a year each in charges. These have contributed to a surplus of £3.4m, which is more than half the organisations' annual budget of £6.2m.

The HFEA said it had built up the surplus as a result of "prudent" budgeting. It said it had expected the number of treatment cycles to fall because of the recession and the squeeze on the NHS budget; this would have led to a reduction in the authority's income. Instead, demand for treatment has unexpectedly continued to increase.

In total, three-quarters of the HFEA's budget comes from fees; the rest is provided by a grant from the Department of Health. In October, the HFEA cut its fees by 28 per cent and it now says its surplus will not continue to grow.

Some fertility specialists think it has not gone far enough. Allan Pacey, chair of the British Fertility Society, called for the authority to return three-quarters of the surplus to the clinics.

"The NHS claims that it can't fund IVF a lot of the time and therefore patients are having to pay privately. That money could help hundreds of people have treatment. It sounds like it's time to give a bit back – it should definitely not go back to the Department of Health," Dr Pacey told the Health Service Journal.

Under guidance issued by the National Institute for Clinical Excellence in 2004, NHS primary care trusts are expected to provide three cycles of IVF to infertile women aged from 23 to 40 who meet certain criteria.

In practice, most trusts restrict the number of free cycles they provide to one or two and many impose further curbs which have tightened following the squeeze on the NHS budget.

The All Party Parliamentary Committee on Infertility criticised the "arbitrary restrictions" on the provision of IVF last year.

A spokeswoman for the HFEA said it had been agreed with the Department of Health that money would not be returned to the clinics because, in the case of private patients, there was no way of ensuring that it would be forwarded to those who had paid it.

Instead the HFEA had planned to use the surplus to "create benefit for patients", but this idea had been rejected by the Government, she said.

A Department of Health spokeswoman said: "Through the annual business planning process we are having ongoing discussions with the HFEA to ensure that its future spending and revenue deliver the most efficient and effective service for patients and those who are regulated."

Clare Lewis-Jones, chief executive of Infertility Network, said: "We strongly believe that the funds built up by the HFEA should be reinvested back into the area which they regulate and that infertility patients should benefit."