News / PCT allocations: A quick guide

Headlines for 2011/12

• Overall, primary care trusts will spend £89bn next year, just under 88% of total NHS spending.
• PCTs will be given average growth in recurrent spending of 2.2% in 2011/12 (0.3% in real terms). Minimum growth is 2%.
• The recurrent allocation now includes £150m for reablement.
• Total PCT allocations, which includes funding outside recurrent allocations such as support for social care (for the first time), dental services and the pharmaceutical global sum, rise by £2.6bn – a 3% rise. PCTs will receive a minimum increase of 2.5% and a maximum of 4.7%.
• A number of PCTs remain under or over their target allocations. Following the allocations, the PCT furthest from target is North Somerset at 7.2% under target – it will receive a 4.2% rise in recurrent spending (4.7% increase in total spending). Ten PCTs remain more than 10% over target and all will get the minimum 2% rise in recurrent spending. The most over-target PCT is Hammersmith and Fulham, which is 22.5% over target.

Allocation formula

• The weighted capitation formula has been revised in a number of ways for 2011/12 following recommendations by the Advisory Committee of Resource Allocations (ACRA). These were accepted in full by the Department of Health.
• The key changes for 2011/12 include a new mental health formula and the use of the most up to date 2011 Office for National Statistics sub-national population projections.
• The new mental health formula for the first time covers inpatient, outpatient and community activity, reflecting the increased provision of mental health services in the community. The previous formula was based on inpatient care only. ACRA recommended separate models for older and younger people to ensure their different needs are captured.
• ACRA reaffirmed its commitment to move the population base to GP registrations rather than ONS population projections. It believes it has made progress in understanding the differences between the ONS figures and registrations in some PCTs and recommends the move to the GP registration basis be made within two years. This is in line with the white paper timescales.
• While a component boosting allocations in areas with a low disability free life expectancy (DFLE) has been retained, as in 2010/11 ACRA found ‘no technical basis’ for weighting the DFLE adjustment and left the decision for ministers. Until further work on allocations to GP consortia and the new Public Health Service has been completed, the DFLE adjustment has been set at 10%.
• There is no longer an adjustment for Communities and Local Government growth areas and growth points, as this policy has been discontinued.
• Non-recurrent allocations for primary dentistry, primary ophthalmology and pharmacy services are being left outside main recurrent allocations. This reflects the intention that these services will be commissioned by the NHS Commissioning Board, rather than by GP consortia.

Future of ACRA

• Health secretary Andrew Lansley said decisions on the future of ACRA would fall to the NHS Commissioning Board, but asked the committee to continue to advise on allocations at least during the transition period.
• Mr Lansley asked ACRA to provide advice on a number of issues for allocations made up to 2013/14. These included moving to GP registrations as the population base within two years; how unmet need is captured in allocations to GP consortia; the impact of rurality on unavoidable cost differences; and how labour market conditions affect NHS costs and how this can be factored into shadow GP consortia allocations from 2012/13.
• The health secretary said he would ask ACRA to advise on the baseline public health allocations to local authorities. He would require ACRA to report by June 2011 to allow shadow allocations to be made in late 2011. He asked the committee to consider how it might augment its current membership, in particular by introducing GP, public health and patient representatives.