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About NHS allocations  

  • Last modified date:
    15 December 2010
  • Gateway reference:
    15229

On 15 December 2010, a total of £89 billion in primary care trust (PCT) revenue allocations was announced for 2011-12. These represent a total increase of £2.6 billion, or 3 per cent.

These include:

  •  £85 billion in recurrent revenue allocations to PCTs, an increase of £1.9 billion (including £150million for re-ablement);
  •  £3.4 billion in allocations for primary dental services, pharmaceutical services and general ophthalmic services non recurrent allocations, an increase of £69 million; and
  •  an additional £648 million to support joint working between health and social care.

Recurrent revenue allocations

The Department of Health currently makes recurrent revenue allocations directly to primary care trusts (PCTs) on the basis of the relative needs of their populations and in line with pace of change policy.  A weighted capitation formula determines each PCT’s target share of available resources, to enable them to commission similar levels of health services for populations in similar need, and to reduce avoidable health inequalities.

There are four elements in the current allocations process:

  1. weighted capitation targets - set according to the national weighted capitation formula which calculates PCTs' target shares of available resources based on PCT populations adjusted for their age distribution, additional need above that accounted for by age, and unavoidable geographical variations in the cost of providing services;
  2. recurrent baselines - which represent the actual current allocation which PCTs receive.  The recurrent baseline is the actual recurrent allocation from the last year of the previous allocation round, plus any recurrent adjustments made in subsequent financial years;
  3. distance from target (DFT) - this is the difference between (1) and (2) above.  If (1) is greater than (2), a PCT is said to be under target.  If (1) is smaller than (2), a PCT is said to be over target; and
  4. pace-of-change policy - this determines the level of increase which all PCTs get to deliver on national and local priorities and the level of extra resources to under target PCTs to move them closer to their weighted capitation targets. PCTs do not receive their target allocation immediately but are moved to it over a number of years.  The pace-of-change policy is currently decided by Ministers for each allocations round

Future allocations

The White Paper, Equity and Excellence: Liberating the NHS, published on 12 July 2010 confirmed the establishment of an independent NHS Commissioning Board which will be responsible for allocating resources and providing commissioning guidelines.

The NHS Commissioning Board will be responsible for making NHS revenue allocations for 2013-14. These will be made to GP consortia in late 2012 on the basis of seeking to secure equivalent access to NHS services relative to the prospective burden of disease and disability.

In addition, the Department  will create a ring-fenced public health budget which will be allocated to local authorities. Details will be provided in due course.

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