The NHS must offer transgender patients awaiting transitioning treatment access to fertility services or it risks breaking the law, the health service has been warned by the country’s equality watchdog.

The Equality and Human Rights Commission (EHRC) is threatening legal action if “outdated” NHS policies, which it says discriminate against the transgender community, are not changed urgently.

On Friday, the watchdog sent a pre-action letter, the first step towards judicial review proceedings, to NHS England, the organisation that runs England’s health service, accusing it of failing to provide standard fertility services to transgender patients before they undergo treatment for “gender dysphoria” – the condition where a person experiences discomfort or distress because of a mismatch between their biological sex and gender identity.

At a time when the provision of fertility services is being curtailed in many parts of the UK, the intervention by the watchdog will trigger a number of financial, ethical and legal questions and place it on a collision course with NHS England, which last night claimed the action was misplaced.

“Decisions on which services are commissioned by NHS England are taken by ministers based on advice from an independently chaired panel of health experts and patient representatives, using a process set out in primary legislation,” a spokesman said.

But Rebecca Hilsenrath, the chief executive of the EHRC, which is independent of, but funded by, the government, insisted that its actions were consistent with its statutory remit to promote and protect equality.

A choice between treatment for gender dysphoria and the chance to start a family is not a real choice Rebecca Hilsenrath, EHRC

“Our laws and our values protect those who seek treatment for gender dysphoria,” Hilsenrath said. “This means that, where appropriate, treatment should be made available in order to ensure that access to health services is free of discrimination. A choice between treatment for gender dysphoria and the chance to start a family is not a real choice. We have asked NHS England to reflect on the true breadth of their statutory mandate and the impact on the transgender community of these outdated policies.”

The removal and storage of eggs and sperm – a process known as gamete extraction – gives transgender people the option of having their own biological children after transitioning treatment. For many, treatment begins in their teens, when decisions about whether they want to have a family may be far from their minds.

The mother of a 14-year-old trans boy, who asked not to be identified, told the Observer: “Not all trans kids would want to choose it in the same way that not all non-trans children would want to go on and have their own children. But it isn’t realistic to expect a child to want to be able to have their own children, so it’s up to the parents to say ‘we need to preserve that option for them’ so that, when they get to an age when they do want to start thinking about it, at least then they have the choice.”

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Currently, clinical commissioning groups – NHS bodies that plan and commission services in their local area – decide whether to provide fertility services on the NHS, but many choose not to offer them to transgender patients, the EHRC claims.

Trans rights groups last night welcomed the commission’s intervention, which could have implications for some of the 4,500 people a year referred by NHS England to gender identity services.

“We welcome this challenge from the EHRC,” said Paul Twocock, director of campaigns, policy and research at Stonewall. “It’s vital that trans people have fair and equal access to fertility treatment, and for many that should include the option of storing of eggs or sperm before medical transition.”

Patients undergoing other forms of medical treatment that may impact on fertility – such as chemotherapy – are routinely offered access to fertility services.

“Currently, the NHS offers little signposting and assistance to [those] wishing to preserve their fertility prior to necessary gender-affirming treatment, despite it being a well-documented, funded option offered to patients about to undertake other life-enhancing treatments that may impact fertility,” said Lui Asquith of Mermaids, the charity that supports transgender children and their families.

Asquith added: “Many young transgender people and their families continue to be faced with the difficult and unique decision to delay often life-saving, gender-affirming treatment while they negotiate fertility preservation via the NHS or privately, or proceed in the knowledge that they may never have a biological family of their own. Mermaids stands with EHRC in asking for this disparity in approach to be rectified by the NHS to ensure that everyone, whatever their gender identity, can access healthcare without discrimination.”