Local authorities’ core public health funding will be cut in real terms in 2015-16, it has been announced.

The £2.79bn settlement for 2015-16, announced last week by the Department of Health, is the same cash figure as the 2014-15 total allocation to councils. Inflation is expected to be around 2 per cent in 2015.

However, in 2015-16 councils that meet performance indicator targets will receive a share of an additional £5m incentive pot.

The DH announcement said a “health premium incentive scheme” aimed to encourage councils to improve against one nationally and one locally chosen public health indicator.

The national indicator will be a measure of successful completions of drug treatment programmes. The scheme will be piloted in 2015 and 2016.

One expert told HSJ the incentive was too small to have a meaningful effect, arguing that it equates to an extra 10 pence per person nationally.

Woman smoking

One expert said the incentive was too small to have a meaningful effect on public health

David Buck, senior fellow in public health and inequalities at the King’s Fund, said: “We are supportive of the incentive scheme in principle, as part of a pack of measures.

“Such an incentive scheme should not be too small, otherwise it won’t make a blind bit of difference. In my opinion [£5m] is too small a figure.”

Meanwhile, Chartered Institute of Public Finance and Accountancy chief executive Rob Whiteman criticised the real terms funding cut in the basic budget.

He said: “Public health is about prevention and reducing pressure in the future on the NHS and social care services by helping people stay healthy and minimise the risk of illnesses.

“It is disappointing therefore that [last week’s] announcement is effectively a real terms cut in spending on this important area and is a short term move in an area that while it faces growing demands, provides large long term benefits”.

Public health minister Jane Ellison said: “The money has again been ringfenced so the focus will remain firmly on improving the health of local communities. This will be further boosted by an extra £5m to target priority areas.”

A consultation on the design of the incentive scheme, and distribution of public health allocations for 2015-16, will be open until 23 October.