NHS funding formula that would have seen North East lose millions is rejected

Health bosses have rejected a proposed funding formula that could have seen the region lose up to £230m a year

A hospital
MP Nick Brown hopes to be able to examine the new NHS funding formula before a definite decision is made

Health chiefs have rejected an NHS funding formula that could have seen the North East lose out on millions of pounds.

NHS England yesterday agreed a new funding formula for local health commissioning which will include a deprivation measure specifically aimed at tackling health inequalities.

The announcement means Health Service chiefs have rejected an alternate plan that excluded health inequality indicators and which meant the region could have lost up to £230m a year.

For months, North East health professionals and MPs alike had urged that the proposed funding formula was not given the go-ahead.

Last night Newcastle East MP Nick Brown said: “I have raised the issue of the funding formula with the Prime Minister, the Secretary of State for Health, other Government Ministers and I’ve tabled motions regarding the issue.

“I hope that both I and other MPs have had an effect, but I do want to examine the full proposals before I make a definitive decision on the new funding formula.”

The new approved formula means that all Clinical Commissioning Groups, which now decide on local health services, will receive a funding increase matching inflation in the next two years, with the most underfunded areas, and those with fast-growing populations, receiving even more.

The funding allocations will be aligned with new NHS planning guidance that will be published this week, following discussion at yesterday’s NHS England Board. The new guidance will ask commissioners to prepare both two-year operational plans and five-year strategic plans.

Within the CCG allocations, 10% of the total available funding will be based on a deprivation indicator to reflect unmet need, enabling CCGs to tackle the impact of health inequalities.

Dr George Rae, chairman of the North East British Medical Association, said: “It is good news that the CCG allocations in the North are being preserved in real terms over the next two years.

“As always though we will have to wait for the actual formula itself to see what funding specifically comes out the other end when all the figures are put in.” NHS England, which has conducted a year-long review of funding allocations, said it had a duty to tackle health inequalities and to ensure equal access for equal need right across the country.

Paul Baumann, chief financial officer for NHS England, said: “We must ensure funding is equitable and fair and we have used the review period to ensure that funding is based on up-to-date and detailed information and it takes into account the three main factors in healthcare needs: population growth, deprivation and the impact of an ageing population.

“What is clear is that doing nothing is not an option. Some areas have not had the funding per head that they need, particularly where population has grown quickly and funding has remained relatively static. These areas are at risk of not being able to provide the services needed by their population, so we need to tackle these differences as a matter of urgency.

“That is exactly what these changes are about and this will mean that some local health services need to receive a settlement that is bigger than inflation to start reducing the local underfunding which has arisen, whether this reflects deprivation, ageing or population growth.”

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