NHS services in the poorest and most needy parts of the country are being systematically underfunded to the benefit of the healthiest and wealthiest.

Analysis by HSJ of the budgets allocated to GPs to pay for drugs and hospital care for their patients show that the wealthiest tenth of the population are, on average, more than 2 per cent overfunded while the poorest tenth are 2 per cent underfunded.

The analysis, confirmed by health economists and the Department of Health, shows the inverse care law - which says those who need healthcare the most are least likely to get it - remains true nearly 40 years after the phrase was first coined.

The average monetary loss to practices in the poorest areas and gain to those in the richest was£94,000 - the equivalent of 12 coronary bypasses. In some primary care trust areas, the trend means that communities lose 1 per cent of the NHS funds due to them for every two-point increase in levels of deprivation and ill-health.

NHS Alliance chief executive Mike Sobanja said money was "in the wrong place".

"Being underfunded means the GPs won't be able to respond to the individual health needs of their population. It means someone else has more resources than they are entitled to."

Worrying trend

David Pink, chief executive of new patient representative body National Voices, said the trend was very worrying. "We can't have an NHS funding system that favours areas of the healthy and wealthy at the expense of areas of deprivation and chronic illness."

The DH provides a "fair shares" methodology to help PCTs divide hospital and drug budgets between local GPs equitably. It targets expenditure to practices where patients have the greatest health needs and highest levels of disease.

HSJ obtained the details of 3,148 of these GP practice based commissioning budgets for the latest year available - in most cases 2008-09 - from 59 PCTs. The details show what each practice's "fair shares" target was, and what it actually got.

The variation ranged from a Brent practice underfunded by 55 per cent to a Berkshire West practice overfunded by 39 per cent.

Only six of 59 PCTs were allocating their budgets on a purely "fair shares" basis. A DH source who was shown HSJ's full data admitted it showed that in 40 of the 59 PCTs there was evidence that those in poorer areas got less than their fair share while those in the richer parts got more.

The strongest trend was in Trafford PCT. There, practices on average lost 1 per cent of their fair share for every two points they moved up the government's index of multiple deprivation. There is a 48 point difference in the index scale between the GP practice in the richest area of Trafford, which is 13 per cent overfunded, and in the poorest, which is 21 per cent underfunded.

A Trafford PCT spokesman said health inequalities were "recognised as a strategic priority" but that the budgets had been based on patients' historical use of services. He said it was moving towards fair shares.

Money savings

Practice based commissioning rules let GP practices keep money saved from their acute care budget to reinvest in preventive services. PCT Network director David Stout said the pattern of underfunding meant there would be less new investment in poor areas.

"If you are underfunded your scope for reducing spending and referrals may not be there, or may not be desirable. It messes with the incentive. A system not based on fair shares is not desirable," he said.

A DH spokesperson said: "DH guidance requires PCTs to ensure practices move towards fair share budgets, and seeks to bring about change to those furthest away from their fair share budgets. Practice based commissioning budget setting is based on PCT discretion."


Under practice based commissioning, PCTs devolve most of their acute and prescribing spend directly to GPs as indicative budgets.

The DH hopes this will lead to a more efficient use of NHS resources and improve preventive care as GPs reinvest savings in new services.

Last year the DH published its "fair share" toolkit to help PCTs determine what each practice should get. This is based on their list size and indicators of health need such as patient age, low-weight births, premature deaths and certain diseases.

But actual indicative budgets have not matched "fair shares" because patients in richer and healthier areas typically demand more health services relative to their need than those in poorer areas.

The DH says PCTs do not need to make any adjustments if the difference is within 10 per cent, although some PCTs have a stated aim of being within 3 per cent.


HSJ made Freedom of Information requests to all 152 PCTs asking for details of each of their GP practices' indicative budget for 2008-09 and whether it differed from "fair shares" allocation guidance from the Department of Health.

  • 89 responded within two months of the initial request.

  • 10 were not able to show any details on practice fair shares targets.

  • 59 provided comparable data, covering 3,148 practices - well over a third of all practices in England.

  • 63 did not respond at all - breaching the Freedom of Information Act.

Each practice's distance from its "fair shares" funding target was then compared with the 2007 index of multiple deprivation score for its postcode and its score in the DH's standardised limiting long term illness index, which measures the relative level of ill health among practice populations.


PCTs with strongest tendency to underfund poor practices (top = worst)





North Lancashire



Hastings and Rother

Central and Eastern Cheshire

East Riding of Yorkshire

PCTs that allocate resources 100 per cent on fair shares


Halton and St Helens

Hertfordshire PCTs




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