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Letters Allocation of NHS resources

Clear winners and losers are created by age only NHS resource allocation

BMJ 2012; 344 doi: (Published 22 May 2012) Cite this as: BMJ 2012;344:e3593

Rapid Response:

Re: Clear winners and losers are created by age only NHS resource allocation

A recent report by Public Health England showed that between 2009 and 2011 people in the North East and North West were more than twice as likely to die early (e.g. Manchester has 455 deaths per 100,000) than people living in the South East (e.g. Wokingham has 200 deaths per 100,000) [1]. Northern areas also have higher rates of premature deaths from cancer, respiratory diseases and circulatory diseases; lower life expectancies; and higher prevalence of limiting long-term illness [2]. NHS need and usage is subsequently higher in the North with, for example, 29 out of the 30 Clinical Commissioning Groups (CCGs) with the highest emergency admission rates for conditions usually managed in primary care located in the North of England [2]. Much of this geographical inequality in health is related to higher levels of deprivation in the North [3].

NHS funding is allocated to areas on the basis of providing “equal opportunity of access for equal need” [4] so that areas with higher health need should have a higher per capita level of NHS funding. The allocation formula currently in use incorporates a deprivation-related measure to account for the additional needs of income-deprived populations – the Health Inequality Weighting (which uses area-level Disability Free Life Expectancy rates) [4]. This has helped to ensure higher budgets for Northern and urban areas, such as London, where deprivation is highest. The relative role of deprivation compared to age as determinants of health need has been subject to political debate over the last year [5][6][7] and the Advisory Committee on Resource Allocation (ACRA) subsequently proposed a new formula in December 2012 [7] – the Weighted Capitation Formula for Clinical Commissioning Groups [4]. This formula removes the Health Inequalities weighting and thereby increases the weight given to population age [4]. Concerns were expressed that the new formula would lead to significant geographical shifts in NHS budgets from “from areas where people sadly have worse health outcomes to those where people have much better outcomes” [7]. This has resulted in an NHS England led ‘Fundamental Review of Allocations Policy’ and a consultation on the proposed changes to the formula [8].

Using the data provided by NHS England in the consultation [3], we have mapped the difference in funding per person between the current ‘Health Inequalities’ formula and the new ‘Capitation’ formula for each of the English CCGs (Figure 1) and NHS Area Teams (Figure 2). This very clearly shows that it is predominantly CCGs in the affluent South of England (particularly the South East) that will benefit from the new formula, whilst those in the poorer North East and North West (and some in the Western periphery) will lose out substantially. For example, in CCGs like South Eastern Hampshire, where average life expectancy is 81 years for men and 84 years for women and healthy life expectancy is 67 years for men and 68 years for women, NHS funding will increase by £164 per person (+14%). This is at the expense of CCGs such as Sunderland, where average life expectancy is 77 years for men and 81 years for women and healthy life expectancy is 57 years for men and 58 years for women, and where NHS funding will decrease by £146 per person (-11%) [9]. More deprived parts of London will also lose out with Camden CCG receiving £273 less per head (-27%) under the proposed formula.

Whilst these changes are not on the scale that a purely ‘age-only’ allocation formula would produce (as modelled previously in [5]), it is our assertion that they are still sufficient to undermine the NHS funding principle of “equal opportunity of access for equal need” as areas with healthier populations will receive more funding whilst those will less healthy populations will receive less. It also needs to be noted that many of these are the same localities that have also lost out from above average cuts to Local Authority budgets [10]. The scale of the potential NHS funding shifts will add further stress onto these local health and social care systems and potentially widen the North-South health divide by reducing access to NHS services in the North. The new capitation formula is out for consultation and we urge concerned BMJ readers to respond [8].

[1] Public Health England (2013) Longer Lives [accessed 7/10/13]
[2] Health and Social Care Information Centre (2013) Indicator Portal. [accessed 7/10/13]
[3] Whitehead, M., Doran, T., 2011. The north-south health divide. BMJ 342, d584–d584.
[4] NHS England, S.F., 2013. Annex C - Fundamental Review of Allocations Policy: Technical Guide.
[5] Williams, D. (2012) Lansley: CCG allocations should be based on age, not poverty Health Service Journal [26th April 2012]
[6] Bambra, C. (2012) Clear winners and losers with an age-only NHS allocation. British Medical Journal, 344:e3593. doi: 10.1136/bmj.e3593.
[7] Dowler, C. (2012) Commissioning board's funding formula move was not 'political', Health Service Journal [18th Dec 2012]
[8] NHS England (2013) Fundamental Review of Allocations Policy
[9] Office of National Statistics (2013) Animated map of healthy life expectancy in England
[10] West, D., 2013. Areas with worse life quality would be hit by allocation shake-up. [accessed 7/10/13]

Competing interests: No competing interests

08 October 2013
Clare L Bambra
Professor of Public Health Policy
Alison Copeland
Durham University
Wolfson Research Institute for Health and Wellbeing, Queens Campus, Stockton on Tees, TS17 6BH