Maternity units and private firms which collect umbilical cord blood to preserve stem cells are being warned they could be acting outside the law.
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The Human Tissue Authority (HTA) has written to more than 150 organisations following concerns that parents, including new fathers, are collecting the blood themselves using kits delivered to their homes.
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Some midwives have said they are being put under pressure to collect the blood illegally and there are fears this could be compromising patient care.
The number of cord blood collections is rising steadily across the UK, with 15,514 in 2009, up from 14,335 in 2008, according to HTA data.
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Private companies charge around 1,500 for extracting stem cells from the blood and storing them for up to 25 years.
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Cord blood is a rich source of stem cells, which have the potential to grow into many different kinds of bodily tissue.
Experts hope that in future, they will be able to replicate the cells in the lab to grow replacement tissue and even organs.
Stem cells are also suitable for treating blood or immune system disorders such as leukaemia and sickle cell anaemia, and there are hopes of helping people with diseases such as diabetes and heart disease.
Critics of the practice say there is very little chance - anywhere between one in 1,000 and one in 200,000 - a child will ever need their own stem cells.
Since July 2008, only suitably trained staff can collect cord blood under an HTA licence held by either the maternity unit or the private firm which employs them.
Five private firms currently collect the blood under HTA licenses and another five companies are approved to store the cells.
The NHS also collects umbilical cord blood for a public bank, with the donations available to patients who may benefit.
Five NHS hospitals in and around London collect and store for NHS Blood and Transplant while two hospitals in Belfast also serve a public bank.
Today, the HTA said it had written to maternity units, firms and professional bodies to warn that unlawful umbilical cord blood collection may compromise patient safety and quality of care.
Dr Shaun Griffin, director of communications at the HTA, said: "Collection of cord blood is the same as any other medical procedure: it needs to be carried out safely by trained staff because collection is not without risk to the mother and baby.
"We don't want parents to leave it too late to organise collection because, if things go wrong, it can cause distress and the sample could be wasted.
"We know of incidents where parents have brought cord blood kits into the delivery room and put pressure on untrained medical professionals to collect cord blood.
"We are also aware of incidents where parents have collected the cord blood themselves, or the collection has taken place outside.
"In at least one case, cord blood was collected in the hospital car
park. "This risks the quality of the sample as collecting under these circumstances is likely to lead to contamination."
Louise Silverton, general secretary of the Royal College of Midwives, said: "The RCM supports this work as it helps ensure that midwives are able to focus their full attention on caring for the mother and baby.
"The time during the birth when cord blood is collected is one of the riskiest times, in terms of safety.
"Therefore, it is essential that midwives are able to concentrate on the birth and are not put under pressure to carry out unregulated and unlawful cord blood collections.
"If parents are thinking about cord blood banking, they need to discuss this with their midwife, or other health professional, to find out if collection is viable.
"Organising collection by a specialist trained professional can take time, so parents should not wait until close to their due date to begin organising a collection."
Private firm Future Health, which has more than 30,000 samples stored, said interest in storing stem cells had become "increasingly popular" in the last decade.
Its UK director, Roger Dainty, said: "We thoroughly support the HTA's campaign to highlight the importance of making appropriate arrangements for legal and safe collections.
"Our standard guidance for parents is to approach their midwife, consultant or hospital as soon as they can to indicate that they would like their baby's cord blood collected.
"If this cannot be undertaken by hospital staff then we can provide a fully trained and licensed third party to do the collection.
"We are of course concerned that some parents may be leaving their decision too late and therefore putting both themselves and health professionals under unnecessary pressure and stress.
"However, we are just as concerned that some parents may be taking desperate measures because they face a postcode lottery as to whether they will be allowed a collection or not at their local hospital.
"There is no national NHS policy regarding cord blood collections and each hospital is currently able to set its own rules.
"Therefore two hospitals only a few miles apart can have completely opposing positions - one allowing collection and the other not."