Fair Shares: A guide to NHS Allocations

Fair Shares: A guide to NHS Allocations
NHS England 10 February 2020

• An illustrated guide to the methodology and approach to the way that resources are allocated in the NHS. This uses images and metaphors to make the ideas and models supporting the formula more accessible, as an introduction to the detailed allocations technical guidance.

• For facts and figures regarding CCG allocations, along with full technical guidance, see www.england.nhs.uk/allocations

Estimates of the impact of English public health grant on mortality and morbidity

Is an ounce of prevention worth a pound of cure? Estimates of the impact of English public health grant on mortality and morbidity
Centre for Health Economics 9 July 2019

• This paper exploits the introduction of a ‘funding formula’ for the English public health grant in 2013/14 to to investigate the relationship between both treatment (healthcare through CCGs) and prevention (public health) expenditure and mortality. It also convert these mortality effects into broader quality-adjusted life year (QALY) effects for both healthcare and public health interventions.
• Cost per QALY calculations reveal that public health expenditure, at about £3,800 per QALY, appears to be about three to four times more productive at the margin than healthcare expenditure (which costs about £13,500 per QALY).

NHS Funding: Clinical Commissioning Groups

NHS Funding: Clinical Commissioning Groups
House of Commons Library Research Briefing 10 October 2018

• This paper and accompanying Excel file gives details of funding allocations for each CCG in England from 2013/14 to 2020/21. The briefing paper also gives details of the process used to allocate the funds.

Technical guide to CCG revenue allocations

Technical Guide to determination of revenue allocations to CCGs and commissioning areas for 2016-17 to 2020-21
NHS England 7 April 2016

• The technical guide sets out the methodology and actual calculation of the allocations which were agreed at the 17 December 2015 NHS England Board meeting and published on 8 January 2016. 
• This documentation covers both the target allocations (determined by the formulae for core CCG, specialised and primary medical care services) and pace of change policy. 
• Supporting analysis for setting CCG running cost allowances and Better Care Fund contributions are also included.
• Also includes ACRA reports and:
• Refreshing the Formulae for CCG Allocations for allocations to Clinical Commissioning Groups from 2016-17 – Report on the methods and modelling 
• Primary medical care – new workload formula for allocations to CCG areas

CCG Financial Allocations 2016/17 - 2020/21

CCG Financial Allocations 2016/17 - 2020/21
NHS England 8 January 2016

Detailed papers:

• Financial allocations 2016/17 – 2020/21
• Total place allocations
• CCG allocations
• Primary Care medical allocations
• Running cost allowances
• Specialised Allocations
• CCG Summary Statements

Policy statement extract:

• This document supports the publication of the detailed financial allocations for CCGs and commissioning areas for the period 2016/2017 to 2020/2021. It should be read in conjunction with the allocations board paper from December 2015 which is available on the NHS England website at https://www.england.nhs.uk/wp-content/uploads/2015/12/04.PB_.17.12.15-Allocations.pdf. 
• The board paper includes greater detail on the allocation of resources to each commissioning stream and the development of the target formulae.
• Our overall policy approach in this area is based upon achieving: 
• Greater equity of access through accelerating alignment of allocations with target formulae with the result that: 
• in 2016/17 all CCGs are no more than 5% under target for CCG commissioned services; 
• in 2016/17 all CCG areas are no more than 5% under target for the total commissioning streams for their population; and 
• a three year transition to a similar position for primary medical care allocations is achieved. 
• Closer alignment with population need through improved allocation formulae with the introduction of: 
• a new inequalities adjustment for specialised care and more sensitive adjustments for CCGs and primary care; 
• a new sparsity adjustment for remote areas. 
• Faster progress towards our strategic goals through:
• higher funding growth for GP services and mental health; 
• the introduction of a Sustainability and Transformation Fund, with a focus in 2016/17 on restabilising the NHS and a priority in subsequent years of accelerating transformational investment. 
• Developing place-based allocations to support holistic collaborative and/or delegated local commissioning where this benefits patients. 
• Stronger long-term collaboration between commissioners and providers stimulated and enabled through:
• shared operational and strategic planning supported by visibility of projected commissioning resources by locality for the next five years, coupled with forward guidance on key tariff parameters in the planning guidance; 
• aligned incentives for effective integrated strategic planning; 
• opportunities to pilot shared financial control totals

https://www.england.nhs.uk/resources/resources-for-ccgs/ 

Public Accounts Committee on funding allocations

Funding healthcare: making allocations to local areas
House of Commons Committee of Public Accounts, 9 January 2015

• The Department of Health and NHS England have changed the way that they allocate health funding to local commissioners. The Department and NHS England have prioritised maintaining the financial stability of local health economies, but this means they have made only very slow progress towards ensuring that all areas receive their fair share of the available funding. 
• Around two-fifths of clinical commissioning groups and three-quarters of local authorities are receiving allocations more than 5% above or below what would be their defined share. This has consequences for financial sustainability—of the 20 clinical commissioning groups with the tightest financial positions at 31 March 2014, 19 had received less than their defined share of funding. 
• One of the main objectives of the funding formulae is to support the reduction of health inequalities, yet the Department and NHS England have only limited evidence on how best to make adjustments for this purpose. 
• NHS England also has more work to do on tackling inaccuracies in GP list data, which are a key determinant in calculating an area’s fair share of funding.

Understanding funding allocations - NAO analysis

Funding healthcare: Making allocations to local areas
National Audit Office, 11 September 2014

• There is wide variation in the extent to which the funding received by local commissioners differs from their target allocations, which are based on relative need. In 2014-15, over three-quarters of local authorities, and nearly two-fifths of clinical commissioning groups, are more than five percentage points above or below their fair share of funding per person. Funding for clinical commissioning groups varies from £137 per person below target to £361 per person above target.
• This report examines how the Department and NHS England allocate funds to the local commissioners of healthcare and compares the three approaches in place now and also compared them with the approach previously used for primary care trusts. 
• Includes Allocations to local commissioners 2014-15

How fair are funding allocations?

Funding healthcare: Making allocations to local areas
National Audit Office, 11 September 2014

• This report examines how the Department of Health and NHS England allocate funds to the local commissioners of healthcare and compares approaches in place now and with the approach previously used for primary care trusts. 
• The report finds a wide variation in the extent to which the funding received by local commissioners differs from their target allocations, which are based on relative need. In 2014-15, over three-quarters of local authorities, and nearly two-fifths of CCGs are more than five percentage points above or below their fair share of funding per person. Funding for clinical commissioning groups varies from £137 per person below target to £361 per person above target.
• The analysis highlights a clear relationship between the financial position of CCGs and their distance from target funding allocations. Of the 20 groups with the tightest financial positions at 31 March 2014, 19 had received less than their target allocation. And, of the 20 groups with the largest surpluses, 18 had received more than their target allocation.
• Allocations to local commissioners 2014-15 are available as a separate publication.

CCG funding allocation explained

Clinical commissioning group (CCG) funding
House of Commons Library Standard Note: SN06779, Updated January 2014

• This briefing outlines the resource allocation formula for distributing funding for health services in England to CCGs. 
• It includes the historical use of allocation formulas and the formula that was proposed and rejected for the 2013-14 funding round. 

Finance highlights of Everyone counts

HFMA guide to the NHS England planning guidance for 2014/15 - 2018/19
Healthcare Financial Management Association, 9 January 2014

• A Healthcare Finance summary of Everyone counts: planning for patients 2014/15 to 2018/19, the latest planning framework from NHS England.
• The highlights are
• Five-year plans, including detailed operational and financial plans for the first two years
• New allocation method and differential growth but no CCG will get less than inflation in 2014/15 and 2015/16
• Administration allocations to fall by 10% in 2015/16
• CCG non-recurrent spending to rise in 2014/15 to create headroom for transformation
• Tariff to fall by 1.5% in 2014/15

Ring fenced PH grants for 2013/14 and 2014/15 - updated 6 January 2014

Public health grants to local authorities 2013 to 2014 and 2014 to 2015 

DH 13 December 2013 - updated 6 January 2014

• The DH has published ring-fenced grants to local authorities for their public health responsibilities for 2013-14 and 201415 
• The allocation covers both services mandated through regulation and all other services that LAs may wish to commission locally. Currently, on average, about one third of spending is connected to mandated services, Services not currently covered by the mandating regulations include obesity, smoking cessation and substance misuse. 

CCG funding allocations 2014-16

CCG funding allocations for next two years following adoption of new formula
NHS England 18 December 2013

• NHS England has published the funding allocations that Clinical Commissioning Groups will receive over the next two years (2014/15 and 2015/16). The allocations use a new funding formula that will more accurately reflect population changes and include a specific deprivation measure. 
• The NHS England Board considered seven options which outlined different ways of moving towards the new funding allocation over a period of time (‘pace of change’). Of the 7 options, NHS England agreed to Option 4 meaning all CCGs will receive a funding increase that will match inflation, with those most underfunded according to the new formula or with fast growing populations receiving up to 2.8% extra in their total allocations each year.
• The ACRA Fair Shares target position is detailed in the supporting note.
• Read the NHS England Board paper for details
• See also the letter from Jeremy Hunt to David Nicholson (16 December 2013) which sets out Clinical Commissioning Groups Allocation Formula recommended by ACRA. 

Resource allocation formula for CCGs - past present and rejected

Clinical commissioning group (CCG) funding - Commons Library Standard Note
House of Commons, 13 December 2014

• This note provides information on the resource allocation formula for distributing funding for health services in England to local commissioning groups: clinical commissioning groups (CCGs). It includes the historical use of allocation formulas; the formula that was proposed and rejected for the 2013-14 funding round; and information about the proposed new formula for 2014-15.

STAR - a new resource allocation tool from Health Foundation and LSE

STAR - Socio-Technical Allocation of Resources
Health Foundation, London School of Economics

• Star is a new approach to priority setting, to help commissioners and those planning services to allocate their health resources to benefit patients in their community, combining technical value for money analysis with extensive stakeholder engagement and discussion.
• Star combines value for money analysis with stakeholder engagement, where an Excel-based tool is used alongside a facilitated stakeholder workshop.
• The Excel-based Star tool enables users to compare the relative value for money of healthcare interventions through simple 'value triangles' graphics. These show the ratio of costs to benefit, taking account of individual patient benefit and population health gain. The use of simple 'value triangles' enables all stakeholders to take part in structured discussions about resource allocation

Review of CCG Allocations Policy

Fundamental Review of Allocations Policy
NHS England 15 August 2013

• NHS England is currently reviewing the local allocation of resources across the full range of its responsibilities, covering both allocations to CCGs and the budgets available for direct commissioning functions in area teams.
• Technical guidance around weighted capitation formula for CCG 2013, CCG allocation formula and a working paper are available for comment and regional workshops are planned for September.

Calculating expenditure allocations

Modelling Individual Patient Hospital Expenditure for General Practice Budgets 
Centre for Health Economics, Dec 2011

• A procedure for calculating a needs-based target allocation for practices using the expenditure of individuals linked to practices, and diagnostic information from past hospital utilisation to construct individual level morbidity measures.