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CCG budgets to be weighted for deprivation

CCG leaders in areas with a higher rates of premature mortality will receive a larger chunk of the NHS budget, under a revamp of allocations announced yesterday.

NHS England said they would press ahead with plans to overhaul CCG funding to address deprivation, with 10% of the total funding allocated to address this.

At the board meeting it was agreed that the best measure of deprivation would be the ‘standardised mortality ratio’ for under 75s, which specifically looks at the proportion of premature deaths in a population.

NHS England decided that the new way of allocating CCG budgets will now depend on population size, age and the under-75 SMR, weighted in a similar way to the local authority public health grant formula.

It also confirmed that it will not be cutting any CCGs budget below the rate of inflation.

NHS England’s chief financial officer, Paul Baumann, said: ‘A particular challenge in [choosing a funding formula] is the best way to reflect the needs of the most deprived communities, who may not currently be accessing the services they need at the right time. The new formula now includes a measure for “unmet need” which aims to address this.’

Overall, funding for NHS commissioners will rise from £96bn to £100bn over the next two years, to ‘protect the NHS from inflation at a time of austerity’.

The announcement addresses fears that, under one funding proposal, 112 CCGs with low population growth who were previously overfunded would have their budgets cut below the rate of inflation in 2014/15.

The paper states the reason for choosing this model was: ‘Under [the rejected option three] some CCGs, particularly those that are above target and have low population growth, can see very low absolute £m allocation growth.’

But the paper states that as a consequence of ensuring all CCGs keep pace with inflation, this ‘reduces the resources available for the most under-target CCGs’. NHS England said that all CCG’s allocations will grow by 2.14%.

Mr Baumann, said: ‘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 now at risk of not being able to provide the services needed by their population, so we need to tackle these differences in funding as a matter of urgency.’

He added: ‘[The chances] 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.’

Dr Charles Alessi, interim chair of NHS Clinical Commissioners, welcomed the proposals, but said that NHS England must manage the pace of change.

He said: ‘This is difficult stuff, because in essence you are taking away resources from somebody else, so as many people are going to howl, as are going to rejoice.

‘I think what’s important is that the pace of change has to be slow enough in that situation, but at least they’re starting down a process, and that’s really good news.’

He added: ‘What other way is there to do this? There’s a limited amount of resource, and there are some parts of the population, or some populations that are increasing very, very rapidly. And that, somehow, has to be reflected. There’s no other way to do this, or at least I don’t know of any other way to do this.’


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