The NHS funding formula is based on an untested scientific premise and should be scrapped, the chief economic advisor to the Department of Health was told last week.

The NHS funding formula is based on an untested scientific premise and should be scrapped, the chief economic advisor to the Department of Health was told last week.

Giving evidence to the Commons health select committee's inquiry on NHS deficits, Plymouth University professor of health policy Sheena Asthana and University College London emeritus professor of statistics Mervyn Stone told DoH official Professor Barry McCormick that the funding formula was 'fundamentally flawed'.

Professor Asthana said there were three problem areas: philosophy, technical design and in the 'conceptualisation of the concept of unmet need'.

Professor Asthana said this meant, in practical terms, that rural deprived areas would experience enduring under-funding unless a new morbidity-based formula was adopted.

And she argued that health planners were 'muddling up' the concept of health equity - the desire to reduce inequalities - with that of healthcare equity.

Professor Stone described the formula as based on a 'vacuum of information and a vacuum of understanding'. He said a major problem with the formula was that it was originally conceived by academics at Glasgow University in 1994, when there was a dearth of good quality epidemiological data.

'There was just one statistician on the committee that put it together - the formula has never been tested in academic circles at all,' he said.

Responding, Professor McCormick told the committee that the DoH was continually revising and honing the formula. 'It is not just based on the opinions Professor Stone mentions.'

And he denied that the formula was at the root of recurring financial deficits in some areas.

He added that it was designed to capture age as well as need, and also factored in access elements so rural areas were allocated cash to address the problem of communities not using the NHS because it was too far away.

Professor McCormick said the DoH has just put out a tender to 'relevant educational bodies to come forward with proposals for a more developed resource model'.

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