News / Two-year allocations set to match inflation

By Seamus Ward


NHS England has reintroduced differential growth in commissioners’ allocations for the next two financial years, but uplifts for all clinical commissioning groups will at least match inflation.

In the current and previous financial year commissioners (CCGs and primary care trusts) received a uniform uplift to their allocations. However, NHS England has adopted a new funding formula, which it said more accurately reflects population changes and includes a specific measure that aims to tackle health inequalities.

The NHS England December board meeting opted for minimum growth of 2.14% (equal to the GDP deflator) for 2014/15 and 1.7% (slightly higher than the forecast 1.48% deflator) in 2015/16.

The most underfunded CCGs will receive more – with the biggest increase 4.9% in the first year and 4.49% in 2015/16.

The move will leave 34 CCGs more than 5% under their target allocations by the end of 2014/15, with 38 CCGs more than 5% over.

NHS England chief financial officer Paul Baumann said inequalities must be addressed.

‘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 said.

‘That is exactly what these changes are about and this will mean some local health services need to receive a settlement that is bigger than inflation to start reducing the local underfunding that has arisen, whether this reflects deprivation, ageing or population growth.’

CCGs generally welcomed the allocations. Stewart Findlay, chief clinical officer at Durham Dales, Easington and Sedgefield Clinical Commissioning Group, which will receive minimum growth, said: ‘While our growth allocation is among the lowest nationally and is driven by change to the allocations formula, in the current economic climate it is as much as we could have expected. We will continue to commission the best healthcare services for our population with the resources we have.’

Fareham and Gosport and South Eastern Hampshire CCGs received above-inflation allocations. While the former will get 3.49% and 3.17%, the latter’s budget will grow by 3.12% and 2.83%.

Andrew Wood, chief finance officer for both, said: ‘The reality is that the higher allocations will help us keep our heads above water and achieve our savings targets.’