Infant formula

Philip Hunt

Phil Hunt on the government’s concerted attempt to hit the poorest areas hardest

In its recent allocations to local authorities, the Coalition government are hitting the poorest areas hardest, with the ten most deprived local authorities seeing their spending power reduced per head of population by eight times as much as the ten least deprived. But there is now also a fear that Ministers want to do the same with the NHS – despite the huge heath challenges such areas face. 

The formula used to determine how much money each part of the NHS gets has always been a controversial area. Current arrangements established by the last Labour government uses a complex formula involving age, poverty and regional price differences to work out how much an average patient in each part of the country should get. This has meant that more money has gone to some of the most deprived parts of the country where endemic health, social and economic problems exist. It is entirely consistent with the 1980 Black Report and a series of research efforts since, showing the direct link between poor health and poverty.

Now however, the Advisory Committee on Resource Allocation (ACRA) has been asked by the government to develop a formula for Clinical Commissioning Group (CCG) allocations that supports equal opportunity of access to NHS services relative to the prospective burden of disease and disability. It follows last year’s remarks by the previous Health Secretary, Andrew Lansley when he said that age should be seen as the main determinant of need – his rationale being that the older the population, the more likely that patients will need NHS cash. 

Of course the needs of the frail elderly will have a significant impact on NHS costs. But to break the link between poverty, health and funding is a fundamental change which could have a devastating impact on some of the poorest parts of the country. It also smacks of political interference at its most infantile. 

Concerned about the issue, the NHS Commissioning Board has announced that it will not be implementing the new formula developed by ACRA for distributing funds to the new Clinical Commissioning Groups for the 2013-14 financial year. Instead, each CCG is to get a uniform increase of 2.3% pending an urgent review of allocations in time for 2014-15. 

The NHS Commissioning Board was clearly worried that the new formula would have moved resources from areas where people have worse health outcomes to those where people have better outcomes. Even so, the result is major uncertainty about future funding. At a time when health budgets are incredibly tight, millions of pounds have been wasted on an unwanted restructuring. In addition, the NHS is being mandated to make a 1% surplus which, coupled with the on-going costs of re-organisation, will translate into yet more real terms cuts on the front-line when hospitals are already full to bursting. 

It is essential therefore, that the NHS Commissioning Board sticks to its guns and resists pressure from Ministers to hit those areas with the greatest health needs the hardest.

Lord Phil Hunt of Kings Heath is a Shadow Health Minister and Labour’s Deputy Leader in the Lords

Published 16th January 2013



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