The Resource Allocation Formula in Scotland
Overview
The Scottish Resource Allocation formula is used in the allocation of around 70% of the total NHS Budget between the 14 territorial NHS Boards in Scotland. This provides funding to NHS Boards for the provision of Hospital & Community Health Services (HCHS) and GP Prescribing. The Formula calculates target shares (percentages) for each NHS Board based on a weighted capitation approach that starts with the number of people resident in each NHS Board area. The formula then makes adjustments for the age/sex profile of the NHS Board population, their additional needs based on morbidity and life circumstances (including deprivation) and the excess costs of providing services in different geographical areas.
The final shares actually allocated to the Boards are different from the target shares calculated by the formula. The policy of the Scottish Government Health & Social Care Directorate (SGHSCD) is to phase in the Formula by way of 'differential growth' whereby all Boards would continue to enjoy real-terms growth in their allocations year-on-year, with those above parity (i.e. above their formula target share) receiving less growth than those below parity until the new distribution was achieved.
The Resource Allocation formula (introduced in 2009/10) replaced the "Arbuthnott Formula" (introduced in 2001/02) which in turn replaced the old SHARE formula (which had been in place since the late 1970s). However, the basic structure used to calculate the target shares by the current and historic formulas are very similar.
The "Arbuthnott Formula" was subject to a major review by the NHSScotland Resource Allocation Committee (NRAC) between 2005 and 2007. The final NRAC report was published in September 2007 and the recommendations in this report were accepted by the Cabinet Secretary for Health & Wellbeing in February 2008 - for implementation in the 2009/10 Resource Allocations.
This site contains
- Information about the formula's structure and components including frequently asked questions.
- Resource Allocation - Latest data for 2013/14 allocation, including a list of tables which show and explain the calculation of the formula's indices and percentage shares for different geographies.
- Resource Allocation - Archive data for previous years.
- Links to a range of relevant publications and websites.
- Contacts details of who to contact for further information regarding the Resource Allocation Formula.
