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Deacon Welcomes Report On Fairer NHS Funding Formula

7th September 2000

Health Minister Susan Deacon today welcomed the publication of the final report of the National Review of Resource Allocation for the NHS in Scotland and its proposals for a fairer formula for the distribution of health spending.

The final report of the independent expert committee, chaired by Professor Sir John Arbuthnott, is the product of work lasting two and a half years.

The report sets out proposals for a new funding formula for the allocation of over £4 billion of NHS money between Health Boards in Scotland. Record levels of investment in NHS in Scotland will, under the formula, be used to create a better health service.

Ms Deacon signalled the intention to move forward with the introduction of the new formula at an early date. She will consider the final report and announce plans for implementation later this month. Formal Health Board allocations will follow the conclusion of the Executive's spending review.

Speaking at the publication of the report, Ms Deacon said:

"This report, which is robust and scientific in its approach, heralds a major step forward in ensuring fairness in health care provision in Scotland. For the first time we will have a method of distributing funds between Health Boards that fully recognises the influence of deprivation and remote and rural areas on healthcare needs.

"No Health Board will lose out under these proposals. All Health Boards are guaranteed a real terms increase in their funding.

"This change will support our key aim of tackling health inequalities in Scotland and improving health in deprived communities. More resources where they are needed most.

"In short, resources will be targeted on those Health Boards that have greatest needs - for example, because they have a high proportion of elderly people in their population, or high levels of deprivation, or significant numbers living in remote and rural areas.

"Tackling a 20-year-old funding formula has been a challenge. Implementing it is part of this Executive's radical agenda for change and improvement. But making those resources work will be the real test of the NHS in Scotland. We expect extra funding to be transformed by the NHS into better services for patients and better health for the Scottish people. Fairer funding for all, a better NHS for all."

Commenting on the publication of his team's updated report, Sir John Arbuthnott said:

"I am delighted to publish the final recommendations of our extensive review of resource allocation for the National Health Service in Scotland. My Steering Group and two sub-groups have now carefully considered all of the points raised during the consultation last autumn and, where appropriate, have improved the proposals. We believe that this work, which spans some two and half years, and draws on a wide range of expertise, turns a new page in the allocation of resources between Health Boards. It targets funding according to the evidence about the level of need, and provides a fair basis to build on into the future."


1. Scottish Health Minister Susan Deacon will make a statement to the Scottish Parliament later this month to detail the arrangements and timetable for implementation of the 'Arbuthnott' funding formula.

2. The National Review of Resource Allocation (the "Arbuthnott Review") was set up in December 1997 under the chairmanship of Professor Sir John Arbuthnott, Principal and Vice-Chancellor of Strathclyde University. A Steering Group which included medical and nursing experts and senior managers from the NHS as well as several people from outside the NHS in Scotland was appointed to carry out this work.

A report from Sir John Arbuthnott and the Steering Group setting out their conclusions and recommendations was issued for consultation in July 1999. The consultation concluded in December 1999, and around 90 responses were received from organisations and individuals including a report from the Health and Community Care Committee in the Scottish Parliament.

The Minister for Health and Community Care, Ms Susan Deacon, asked Sir John Arbuthnott to reconvene the Steering Group to consider the comments received, to carry out any further work required to address the issues raised. Since December 1999, the Steering Group chaired by Sir John Arbuthnott has carried out a thorough review of the earlier work in the light of the comments received, and the revised conclusions and recommendations are set out in their Final Report.

The Steering Group drew on a wide range of expertise from NHS in Scotland, including:

Professor John Bain, Professor of General Practice, University of Dundee; Mr David Bolton, Director of Primary Care, Lothian Primary Care NHS Trust; Dr Adam Bryson, Medical Director, National Services Division; Mr Richard Copland, Director of Information & Statistics Division; Mrs Kay Eastwood, Director of Nursing Services, Lomond and Argyll Primary Care NHS Trust; Dr Frances Elliot, Medical Director, Fife Primary Care NHS Trust; Mr David Hird, General Manager, Forth Valley Health Board; Dr Calum MacLeod, Chairman, Grampian Health Board; Professor Gavin McCrone, Vice-Chairman, Lothian University Hospitals NHS Trust; Ms Fiona MacKenzie, Chief Executive, Highland Primary Care NHS Trust; Dr Lesley Wilkie, Director of Public Health, Argyll & Clyde Health Board.

News Release: SE2396/2000
7 Sep 2000

[This article has been transferred here from our archives]


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