This website places cookies on your device to help us improve our service to you. To find out more about the cookies, see our Privacy and Cookies notice
ISD Scotland better information, better decisions, better health

Resource Allocation Formula

Finance

NHS National Services Scotland ISD Scotland & NHS National Services Scotland

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 latest target shares are available here.

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 Formula was developed by the NHSScotland Resource Allocation Committee (NRAC) between 2005 and 2007, with the final NRAC report being published in September 2007 (http://www.tagra.scot.nhs.uk/research/). 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. The Technical Advisory Group for Resource Allocation (TAGRA) was set up to continually maintain and develop the Formula and ensure that it remains fit for purpose into the future.

The 'NRAC' formula replaced the old 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 structures of these formulae are very similar.

This site contains


© ISD Scotland 2010
Information Services Division,
NHS National Services Scotland,
Gyle Square,
1 South Gyle Crescent,
Edinburgh EH12 9EB,
Tel: 0131 275 7050
NSS.isdSHIS@nhs.net  
Contact Us

About Information Services Division | Contact Us | Accessibility | Complaints
Copyright | Terms and Conditions | Privacy | Freedom of Information

ISD is a division of NHS NSS
Working at the very heart of the health service, NSS delivers services critical to frontline patient care and in support of the efficient and effective operation of NHS Scotland. Visit the NSS Website for more information