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This paper reports the findings of a questionnaire survey of the experience of NHS trusts’ mandatory collection and the use of ethnic group data of hospital inpatients in the South Thames Region, and the analysis of the ethnicity field in the Hospital Episode Statistics (HES) database for England. High levels of invalid ethnicity coding in hospital episode statistics, 44.0% (regional range 31–76%) in 1996/97 and 62.9% (range 43–90%) in 1995/96, render the data unusable. Over a third of NHS trusts felt there were other ethnic group categories for which data should have been collected, especially a subdivision of the white group. Only one in five trusts found the collection of ethnic group data useful and almost nine-tenths of trusts had made no use of the data, all but one trust stating that collection had not influenced the way services were provided. High levels of incompleteness of ethnic coding and data of questionable quality make it impossible to interpret the relative access of the ethnic minority population to hospital services and such collection is, arguably, at variance with Caldicott guidelines on patient-identifiable information. A high political priority must be accorded to the operationalisation of mandatory collection in order to meet new government objectives on fair access to services. Public Health (2000) 114, 254–259 [ABSTRACT FROM AUTHOR]