Ministers are allocating almost a quarter of the money for hospital and community health services without making any adjustment for the differing needs of local populations, MPs on the Commons Health Select Committee have been told. The result, according to Roy Carr-Hill, a specialist from the Centre for Health Economics in York who helped develop the new resource allocation formula for the Department of Health, "is basically to benefit the South at the expense of the North, and the shires at the expense of inner cities".
Not since 1976, when the first moves to equalise health spending according to need were made, has the department applied no needs-weighting to such a large chunk of the NHS.
In an attempt to make NHS spending "fair", the cash provided per head of population is being adjusted to allow for unemployment, standardised death and illness rates, people living alone and dependents in single carer households - all items which raise the demand for health care. Slightly differing versions of the formula have been applied to the 64 per cent of the budget that goes on acute care and the 12 per cent spent on mental illness.
The York researchers, however, were unable to devise an adequate separate index for the 24 per cent of the budget which covers community services, mental handicap, administration and a string of smaller services. They told the department ministers should use the acute index or stick with the old needs formula to adjust spending.
Among the districts set to gain most are the five Surrey health authorities which include the seat of Virginia Bottomley, Secretary of State for Health, along with Wycombe, West Berkshire and Tunbridge Wells. If the decision is not changed, each will end up 4 to 5 per cent better off.
The biggest losers include health authorities in Manchester, Liverpool, Sunderland, Hackney, Durham, Barnsley and St Helens. They face losses of 3 to 5 per cent.
Hugh Bayley, the Labour MP for York who is a member of the Health Select Committee, said: "It is hard not to be cynical about the motives for this decision when you see the Health Secretary's own health authority among the top 10 gainers."Reuse content