HC Deb 25 July 1988 vol 138 cc132-3W
Mr. Tony Lloyd

To ask the Secretary of State for Social Services if he will make a statement(a) on the way in which money is allocated between different National Health Service regions at present and (b) on the way in which money would be allocated between different regions under the formula being considered by the National Health Service Management Board giving details of gains and losses.

Mr. Newton

There are two stages to the resource allocation process. The resource allocation working party formula is used to determine each region's target "fair share" of the available resources; Ministers then decide on the pace at which regions' annual allocations are to be adjusted to bring them into line with these targets.

The existing resource allocation working party formula measures the relative needs of each region by taking account of population (and the relative use made of health services by people of different age groups and sexes); morbidity as indicated by standardised mortality ratios; patient flows between regions; and higher staff costs in London and the south-east. A separate adjustment is made to account for the extra service costs associated with medical teaching.

The National Health Service management board's review of the resource allocation working party formula examined each component of the formula and made recommendations aimed at improving its measurement of relative need. Full details of the recommendations, and of the effects they would have on regions' funding targets, are contained in the final report on the review, which was published on 19 July. A copy is in the Library. Decisions on annual allocations were outside the remit of the review, and the report recommends only that the effects of any changes should be carefully phased, to avoid major disruption to health authorities' existing plans. It is not therefore possible to estimate what would be the effects of the review recommendations on regions' annual allocations.

As my right hon. Friend announced in his reply to my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) on 19 July at column 559, the Government will consider this report in the wider context of the National Health Service review.