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Public health funding formula to leave poor areas hit hardest

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Councils in the north-west of England are preparing to meet senior officials from the Department of Health to lobby for changes to the funding of public health services after research revealed a major transfer of resources from poor to rich areas was likely.

Figures produced by Liverpool University academic Ben Barr for Blackburn with Darwen BC show proposals to allocate public health funding according to need would leave councils in the most deprived 20% of areas losing £8 per resident and those in the most affluent 20% gaining the same amount.

The figures are based on an analysis of how the DH’s estimated £2.2bn budget for local authorities’ new public health function would be split between councils, under the formula proposed last month by the independent Advisory Committee for Resource Allocation.

The formula, which is out to consultation, will replace the current system under which funding for public health is allocated according to historic spending levels by primary care trusts.

Chief executives and directors of public health from the north-west – where councils are set to lose an average £17 per head – were due to present the new analysis to Stephen Lorrimer, deputy director of resource allocation at DH on Thursday.

They will call for the proposed formula for allocating the money, which is based on the number of deaths of under-75s in an area, to be replaced with one that is more heavily weighted towards poverty.

They will argue that historic levels of spending on public health are higher in more deprived areas because the level of need is greater, and will say authorities in those areas should not be penalised for having invested in preventative services.  

Addressing the NHS Clinical Commissioners conference in April, health secretary Andrew Lansley said council funding for public health would be based on indices of deprivation, with a “direct expectation” that the money would be spent on tackling poverty-related health need.

Dominic Harrison, joint director of public health at NHS Blackburn with Darwen, told LGC the formula went against that policy aim. “We’re completely at a loss to understand the logic behind it,” he said.

He said Mr Lansley had also been “testing the water” on proposals to base allocations to clinical commissioning groups on age rather than poverty. “If that goes ahead it would have a huge impact on deprived areas, and adding these public health proposals as well could be disastrous,” he said.

Mr Barr’s calculations show that if public health funding was allocated to councils based entirely on levels of deprivation, the allocations would be almost the same as the historic levels of PCT spending.

Mr Harrison said he would call for a higher proportion of the NHS savings made under the ‘Nicholson Challenge’, which asks the NHS to make 4% efficiency savings every year, to be transferred to public health. The extra funds should be used to protect historic levels of expenditure in deprived areas and bring other areas up to the national average level, he said.  

A report prepared for this week’s LGA Executive meeting said the historic levels are “no longer fit for purpose” and a new formula must be set up. It says the LGA “broadly supports” the proposed formula, but that the overall public health budget must be increased “in order to mitigate the effects of pace of change on those areas that are currently above target”.

In a statement, the DH said current levels of spending would be protected until 2013-14. “We are keen to receive feedback and suggestions that will inform ACRA’s final recommendations,” it said.

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