§ Mr. KeyTo ask the Secretary of State for Health what is the origin, statistical basis and purpose of the market forces factor in the national health service executive's new formula for resource allocation; and if he will make a statement. [32844]
§ Mr. SackvilleTo be equitable, the allocations system has to take account of the fact that the cost of providing services is higher in London and the south-east. A market forces factor—MFF—was first introduced on the recommendation of the advisory group on resource allocation in 1980 and later reviewed in 1988.
The MFF was reviewed in 1993 as part of the review of weighted capitation. The review was able to take account of more detailed data on staff costs from the new earnings survey as well as a detailed model of how care is purchased across the country.
A more detailed explanation is in the booklet "HCHS Revenue Resource Allocation—Weighted Capitation formula" and a more technical paper "Market Forces Factor—Staff Pay Adjustment" copies of which are available in the Library.