PRIMARY CARE FUNDING

Published: 17/02/2005, Volume II5, No. 5943 Page 16 17

PCTs now know how the£135bn due to them for 2006-08 is to be divided. But as Mary-Louise Harding reports, in much of the country the allocations may only allow a continuation of the status quo, leaving crusading work on public health squeezed

Perhaps in the same slightly surprising way we are all supposed to feel warm inside at the prospect of a royal wedding and thus re-elect the government, the primary care management community also feels reluctant to find too much fault with last week's announcement on how the cash is going to be divvied up between primary care trusts for 2006-07 and 2007-08.

There is certainly little doubt that the initial reaction to health secretary John Reid's announcement that£135bn was due to flow to PCTs over the crucial final two years of the NHS plan reforms was mostly muted.

'There is been a pretty low-key response, ' says Edna Robinson, chair of the National Primary and Care Trust Development Programme chief executive network.

It seems there is enough to keep the wolves from the door, but not nearly enough to galvanise the PCT reforming zeal that characterised the early years of the NHS plan.

'Although there is evidence of genuine growth and improvements in funding positions, it means that trusts will more or less maintain the status quo in large parts of the country.' It seems the more likely reason for any apathy is the familiar 'devil in the detail' factor. Many say they need to wait until the froth surrounding the announcement has died down and their finance directors have numbercrunched before they can get a real feel for the implications.

What is immediately clear, though, is that the 88 'spearhead' PCTs singled out in the government's recent public health white paper, Choosing Health, have now got the funding they were promised - an equal slice of an extra£500m earmarked for them. This will be spent on health trainers, improved smoking-cessation services and school nurses to help reduce what the white paper described as the 'appalling inequalities in life expectancy and concentrated problems of disease' in their populations.

So are these funds ringfenced to ensure the cash does not get diverted into, say, Agenda for Change?

Health minister John Hutton says he would 'expect' PCTs to spend a significant proportion on the health improvement agenda as set out in Choosing Health, but the DoH would not be sending out detailed instructions on which pound should go where.

'It is not ringfenced, ' he says. 'We are increasingly not using ringfenced money, often because of complaints from the NHS itself about it. And if we want as much flexibility as we can for the frontline, then ringfencing militates against that.'

Flexibility and freedom

Speaking to HSJ during a walkabout at a pioneer healthy living centre in Peckham - situated in a spearhead PCT in Southwark, south-east London - the day after the allocations were announced, he adds: 'PCTs have got to balance all of this, and I know It is difficult.

'But the right thing to do is to remove as much ringfencing as possible to give PCTs on the frontline as much flexibility and freedom as possible.' All well and good, say those close to the frontline. But unless clout is added to the Choosing Health wishlist, it will be hard to 'protect' the investment.

'I do not disagree with the DoH on ringfencing, ' says Ms Robinson.

'PCTs do have to make a decision about their own priorities and they do not want to be parented by the centre, but there need to be stronger targets to support the health improvement agenda.

'We have a culture of dealing with the top target first - so giving health improvement the same weight as accident and emergency waits, for example, would help to ensure the money went in the right direction.

'The extra money is welcome, and overall the allocations are satisfactory. But It is not enough to create a new footprint for PCTs to pursue radical change in shifting emphasis from treating to preventing illness that they want to do, ' she concludes.

Her point is echoed by a spearhead PCT chief executive, City and Hackney's Laura Sharpe.

'Although 9.5 per cent is good compared to the 8.1 per cent most PCTs got, we will still not be at our target capitation by the end of the period and at that point [end of the financial year 2007-08] investment will start tailing off anyway so you do start to wonder if we will ever get there, ' she says.

Which means there is a strong likelihood that the extra cash intended to improve the 'appalling inequalities' on her patch identified by health secretary John Reid will get diverted into a more demanding target, such as shoring up secondary capacity.

'We are part of the way through trying to work that out, but It is risky - significantly risky - that we will not be able to protect it all, ' she says.

'I would like to, but it will be difficult because of all the high-profile, highpressure access targets in the system.' Nottingham City PCT chief executive Sam Millbank is more upbeat about using the funding for health improvement, but warns that she will not be drawn into setting up 'itty-bitty' pilots.

'This is for real. We will not be using it to build non-core related additional activity, ' she says.

'I want to be able to link back into priority targets - if you like, operationalise the targets we have - and make sure I have a coherent strategy to tackle the killer diseases that means I have every manager and every clinician brought into public health.' But others are worried that the new money will do nothing more than re-plug the gaps left by other sources that are set to dry up over the period, such as the nonrecurrent funding given for local implementation strategies.

The government knows there is still some distance left to travel, but progress has been better than expected in getting everyone closer to target, according to Mr Hutton.

'We have been able to make more progress than we thought we would be able to, he tells HSJ. 'There is still more to do - we acknowledge that - but There is a very complex balance to strike here.

'We want to close the gap, but we want to make sure that every PCT wherever they are has enough to do the things We are asking them to do over the next three years.

'So We have got to be fair to everyone. We are not taking away from those areas that are over their fair share. They're all getting significant growth well above inflation - huge, very significant real-term growth.

'And We have been able to do that at the same time as narrowing the gap for those PCTs that are under their fair share. Those PCTs that are in the category of being a long way from target now have very significant additional resources to deploy to improve health services.' There is no doubt that the£135bn allocations mean that the government has remained steady on its commitment to the NHS, and the recommendations in Sir Derek Wanless's review of future funding of the NHS.

Adjusted figures

However, some in the financial community cried 'foul' after last week's announcement used unweighted population per head figures to show a greater comparative growth than if the agreed national weighted capitation formula had been used.

This shows real growth because it takes into account age, morbidity and social need.

Unsurprisingly, adjusted figures tell a very different story. The tables below show how much more the 10 top-funded PCTs appear to receive when compared by weighted expenditure per head of population rather than unweighted. For the bottom 10 funded PCTs, weighted expenditure is considerably less than unweighted.

Former NHS health authority chief executive and finance director Neil Wilson, who now runs a financial consultancy, told HSJ that the DoH's use of unweighted population figures was 'very naughty'.

'The DoH has attempted to obfuscate this issue by including expenditure per head of population in the press release, which is extremely misleading, ' he says.

'The true comparison is expenditure per head of weighted population. For example, the unweighted version shows Easington apparently doing very well at£1,912 per head, whereas the weighted version shows them at only£1,315 - a major difference by anyone's standards, ' he adds.

So why were unweighted figures used? 'We are comparing allocations per unweighted person to show the strides we have made in allocating more funding to the most needy areas, ' says the DoH.

'The 5 per cent most needy areas will receive£1,710 by 2007-08, compared to a national average of£1,388 per head.' Topslicing of PCT budgets to fund the second wave of independent treatment sector procurement is another worry looming on the horizon.

Mr Hutton told HSJ that the allocations include 'enough [for every PCT] to commission the activity that they say they need to meet the 18-week target'.

But he wouldn't be drawn on the detail - apparently that devil will be published in 'two weeks'. Watch this space.