Midwives presented new evidence yesterday of a spiralling funding crisis in England’s hospitals that has opened up a £340 million cash gap in maternity services alone.

The dangerous shortfall is the result of the current payment-by-results (PBR) system that pays fixed fees for care that is “bought” by NHS commissioning bodies.

A Royal College of Midwives (RCM) study estimated that the gap between hospitals’ maternity costs and the amount they were paid under the national tariff leapt by £40m between 2011-12 and 2012-13 according to the most recent figures.