DoH cuts deprivation factor in PCT fund allocation

Health ministers have cut the priority given to health inequalities in allocating PCT funding despite pledges to increase funds for deprived areas.

The adjustment is designed to increase funding for PCTs in more deprived areas, which incur higher costs tackling health inequalities (Photograph: SPL)
The adjustment is designed to increase funding for PCTs in more deprived areas, which incur higher costs tackling health inequalities (Photograph: SPL)

Ministers chose to reduce by a third the impact of a health inequalities formula used in NHS budget allocations, documents reveal.

Although all PCT allocations will rise in 2011/12, PCTs in deprived areas could receive proportionally less funding in 2011/12 than they would have done under the previous measures.

The DoH said the measures would ensure balance between tackling health inequalities and maintaining access to healthcare services.

It comes after Communities Secretary Eric Pickles announced last week a 9.9% cut to the ‘formula grant’ for local councils, with the biggest falls occurring in poorer areas.

DoH documents show ministers opted to cut the weighting given to Disability Free Life Expectancy (DFLE) in the formula for budget allocation from 15% to 10%.

The adjustment was introduced in 2009/10 by the Advisory Committee on Resource Allocation (ACRA), the body responsible for calculating how the NHS budget is distributed between PCTs.

The adjustment is designed to increase funding for PCTs in more deprived areas, which incur higher costs tackling health inequalities.

ACRA had concluded it was not possible to ‘technically determine’ the cost of reducing health inequalities between PCTs in a way that could be used to inform allocations.

As such, ACRA recommended that ministers decided the weight of DFLE in the calculations ‘based on the priority attached to reducing health inequalities rather than just responding to them’.

In previous years, the Labour government set weighting for this adjustment at 15%.

But despite assurances that reducing health inequalities is a key priority, the government has reduced this adjustment in the allocation calculation for 2011/12.

A DoH spokeswoman said the government was retaining the DFLE adjustment as part of its commitment to health inequalities.

The government said it was necessary to keep funding for work to reduce health inequalities balanced with funding for access to health services.

The spokeswoman said: ‘Until further work on allocations to GP consortia and the Public Health Service has been completed, an adjustment of 10% strikes the right balance between ensuring that vital work on health inequalities, including public health, continues and that funding to support access to healthcare is sufficient.’

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