The NHS Commissioning Board’s deputy chief executive has insisted it was not making a “political point” in declining to implement a new formula for allocating health funding across England.
The board announced yesterday that it would not use the formula developed by the independent Advisory Committee on Resource Allocation to allocate funds to the new clinical commissioning groups, which will take control of £64.7bn NHS funds in 2013-14.
Instead, it said each CCG would get a uniform 2.3 per cent funding increase, and the board would lead an “urgent” review of allocations, to be completed in time to inform the following year’s allocations round.
Speaking to HSJ following the decision, commissioning board chief operating officer and deputy chief executive Ian Dalton said that the new formula did not give weight to health inequalities in the same way that the old formula for allocating primary care trust funds had done.
“It’s important to understand the role of the commissioning board here,” he told HSJ. “We are charged with working at arm’s length from government, and with driving up outcomes and reducing health inequalities. So we look at the issue through those lenses.”
He said the board had considered the new ACRA formula at its meeting last Friday, and “the view was and is that using the formula on its own would have, in large measure, moved resources from areas where people sadly have worse health outcomes to those where people have much better outcomes”. It was, he added, “hard to see how that fitted with our mission”.
The board’s move is liable to prove controversial with some Conservative politicians, who have argued that age, not deprivation, is the principal determinant of demand for NHS services. In April, the then health secretary Andrew Lansley said of the funding formula: “Age is the principal determinant of health need.
“What should happen – the advisory committee will do this, I won’t – [is that] the number crunching should get progressively to a greater focus on what are the actual determinants of health need.”
But Mr Dalton said the board was “not making a political point at all” by declining to implement the new formula.
Asked what the point was of having an independent body to give advice on allocations if the board did not take its recommendations, he replied: “I think the key distinction there is that ACRA produced its advice on how it believed resourcing should follow the current pattern of need.
“That was the technical job they’d been asked to do and they did that very effectively. But as we have the objective [of] reducing health inequality and improving outcomes across the whole of England, it’s therefore a different set of questions that we now pose in terms of what should drive resource allocation. It’s really… our mandate and our ambition on behalf of patients in England that has taken us to this place.”
He added that the board did not yet have a position on whether health inequality should be one of the determinants of health funding allocations, as that would prejudge the outcome of the review.