Tories under fire over NHS funding formula switch

Experts have questioned the viability of Conservative plans to rewrite the NHS funding formula to redirect cash to areas with large elderly populations.

Mr Simmonds: Conservatives plan to rewrite the NHS funding formula
Mr Simmonds: Conservatives plan to rewrite the NHS funding formula

Shadow health minister Mark Simmonds said: ‘There is a direct correlation between the age of a population and the burden of disease that is not reflected in the current formula.'

He accused Labour of ‘deliberately over-emphasising socio-economic deprivation... to transfer resources to their urban heartlands'.

A Conservative government would take such decisions out of ministers' hands and transfer them to an independent NHS board, he said.

But health economists said there was ‘no evidence' that areas with high elderly populations were under-funded.

They noted that the formula that distributes money to PCTs was designed by the independent Advisory Committee on Resource Allocation.

John Appleby, chief economist at the King's Fund, said that Tory figures which purported to show five-fold variations in spending on certain treatments largely reflected the cost of running health services in different parts of the country.

‘I wouldn't jump immediately to the conclusion that the formula is biased against areas with more elderly people,' he said. ‘The weighted capitation formula is possibly the most sophisticated way of allocating public money in the world.'

Matthew Sutton, professor of health economics at the University of Manchester, agreed that the Conservatives had ‘misunderstood the formula'. ‘I've seen no evidence of the need to redistribute money to areas with higher elderly population.'

The allocation formula is designed with two aims: to share cash fairly on the basis of population need, and to reduce ‘avoidable health inequalities'.

Read this week's GP dated 30 October for the full version of this story

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