Page last updated: 28-APR-2009

Resource Allocation Formula

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 Scottish Government decided 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 new 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 new and existing 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 publication highlights some of the work carried out by ISD, in collaboration with the Scottish Government Health Directorate, to the implement the new Resource Allocation formula in Scotland for the first time to calculate 2009/10 target shares.  Results of the analysis, showing the target shares for the latest 2009/10 calculations and the shadow-run for 2008/09 are available using the links below.

This site contains

  • Information about the formula's structure and components including frequently asked questions.
  • Resource Allocation - Latest  data for 2009/10 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.

Main contact: Email See Contacts page