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Improving the allocation of health resources in England

How to decide who gets what


While the principles behind resource allocation in the English NHS have changed little since the mid-1970s, the NHS has changed considerably. This paper argues that the resource allocation system needs to change accordingly.

The paper explores how the health resource allocation process and the formula on which it is based have changed over time, and how it will work from April 2013. It suggests some improvements that can be made to support a more coherent health and care system.

Key findings

  • The government’s health and social care reforms risk creating a more complex and fragmented resource allocation process.

  • The current system lacks transparency and the formula is so complex that most local citizens, politicians and clinicians find it difficult to interpret. Moreover, the research that informs decisions is only made available to the public long after those decisions have been made.

  • Concerns remain that the health allocation formula does not distinguish sufficiently between need and demand for care.

  • The politics of the pace of change policy have undermined much-needed decisions on reconfiguration and other service improvements.

  • Some very different approaches to resource allocation may be needed as the focus of commissioning shifts to outcomes, as decision-making and accountability are increasingly devolved to local areas, as more integrated delivery systems develop, and as relationships between commissioners and providers undergo considerable change.

Policy implications

The Department of Health needs to address the risks posed by changes to the resource allocation process. The fundamental review of resource allocation announced by the NHS Commissioning Board (now NHS England) must be given sufficient scope and resources to be just that. It must address some critical questions: is a formula-based approach to health resource allocation in England still appropriate? And should resource allocation be a neutral way of allocating funds ‘fairly’ to the NHS and local government, or a policy tool to deliver better patient outcomes and system-wide change? The review must grasp this opportunity for more radical, longer-term thinking about how to make the resource allocation process clearer, more transparent, and fit for purpose.

David Buck on improving the allocation of health resources

David Buck, Senior Fellow in Public Health and Inequalities at The King’s Fund, explains how health resources are allocated in the English NHS, and how improvements to the process could be made to support a more coherent health and care system.