News / New formula for Scotland

NHS Scotland will adopt a new resource allocation formula from 2009/10, cabinet secretary for health and wellbeing Nicola Sturgeon has confirmed.

The National Resource Allocation Committee (NRAC) formula, which aims to reflect health needs and costs within different communities in each health board, is expected to raise allocations to half of the boards. The formula also adjusts allocations for under-use of services in deprived areas and unavoidable excess costs in rural areas.

It will replace the Arbuthnott formula, which allocated 70% (£6.8bn) of the NHS Scotland budget in 2007/08. A review group will be appointed to develop the formula.

Ms Sturgeon said she had accepted the NRAC recommendations in full and the new formula would be phased in from 2009/10.

‘I place high importance on the need to avoid turbulence in NHS board funding and can confirm that no board will receive less funding than it does at present – and that any changes will be phased in over a number of years,’ she added.

However, six boards whose allocations are below their target Arbuthnott and NRAC allocations will receive extra funds in 2008/09. The standard increase will be 3.15%, but the six boards will get between 3.46% and 3.81%. The average increase will be 3.3%.

Ms Sturgeon said: ‘An additional £257.5m is being provided to enable NHS boards to meet the needs of their local populations in line with the priorities we have set.’