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DH considers alternative funding formula

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Controversial proposals for distributing public health funding that would see a major transfer of resources from poor to rich areas could yet be significantly changed, Department of Health documents suggest.

A presentation by a DH civil servant to public health officials and seen by LGC said factors such as deprivation could yet be recognised within the formula for allocating resources or in a supplementary incentive payment.

Under proposals by the independent Advisory Committee on Resource Allocation, councils’ new public health role would be funded according to the mortality rate of under-75s in an area.

LGC has reported calls for that formula to be replaced with one more heavily weighted towards poverty, after research showed the proposals would benefit the most affluent 20% of areas at the expense of the most deprived 20% (

Finance directors and directors of public health met Stephen Lorrimer, deputy director of resource allocation at DH, last week to discuss their concerns.

A presentation given at the meeting suggests a range of other factors are also being considered, including deprivation, growing populations, the number of elderly people and the levels of poor health in an area.

The document said that as well as funding for ‘mandated services’, two-thirds of funding for councils would be paid through a health premium. This will include an “incentive element” although this will not be introduced before 2015-16.

The department will now establish an expert group to advise on how the incentive should be structured. The document said it could include “derived measures of inequality”.

The suggestion that funding would not follow levels of deprivation has proved controversial with council leaders who openly questioned the LGA’s decision to support the Acra proposals at the association’s executive meeting last week.

A report discussed at the executive said the group “broadly supports” the proposed Acra formula, but that the overall public health budget must be increased.

Durham CC leader Simon Henig (Lab), left, said: “I was a mystery to my authority and

others when this decision was taken that the LGA broadly supports the use of this measure [of need]. Other evidence suggests that it is highly questionable.

“There is a need for more evidence behind the sweeping statements in this report.”

Cllr Henig was supported by LGA Labour group leader David Sparks who called for officers to prepare a fresh report.

However, LGA Liberal Democrats called on the association to focus on the positive aspects of the transfer of public health.

Gerald Vernon Jackson, leader of the Lib Dem group, said it was important to emphasise that the transfer of public health to local government was good news.

“There will be issues with distribution but we would be churlish if we did not recognise that this is something being passed from central government to local government,” he said.

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