News / Scottish formula to address unmet need

In October, the NHS Scotland Resource Allocation Committee (NRAC) submitted its final recommendations for changes to the Arbuthnott formula, which has been used to allocate funding to health boards for hospital and community health services and GP prescribing since 2000.

The new NRAC formula aims to reflect differences in health needs and costs in different communities within board areas. It would also adjust for under-utilisation of services in deprived areas and the unavoidable excess costs of delivering hospital services in rural areas.

Under the NRAC formula, the biggest losers would be Western Isles (13.2% less) and Borders (a drop of 7.6%). Seven boards would gain, with Lothian health board’s funding set to increase the most (5%). The proposed NRAC changes would redistribute £81.9m between boards – 1.2% of the total budget.

NHS Lothian finance director John Matheson (right) said: ‘We were pleased to see that the key points we made in our submission to the NRAC have been recognised in the final report. These included a recognition of the increase in population and changing demographics in Lothian and of the excess costs incurred in supplying healthcare in Lothian as a result of the buoyant property market and the competitive employment situation in Scotland’s capital city.’

The Scottish government’s health and well-being secretary Nicola Sturgeon said the proposals would be considered but insisted boards would move to their new target allocations over a number of years and changes would not be implemented before 2009/10.