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NHS: Finance

Volume 463: debated on Thursday 19 July 2007

To ask the Secretary of State for Health how the relative needs formula component of the formula grant for local authorities is determined; when it was last reviewed; which variables are included in the formula; who determines the formula; and if he will make a statement. (148141)

The social care relative needs formulae for all client groups were reviewed in 2005 and new formulae were introduced for the 2006-07 settlement. The formulae are mainly produced through academic research projects and will remain unchanged for the next three-year settlement.

The older people’s formula consists of a basic amount per person aged 65 and over and top-ups for age, deprivation, sparsity, low income from fees and charges, and area costs.

The variable in the age top-up is the proportion of the 65 and over population that is aged 90 years and over.

The variables in the deprivation top-up are the proportions of people aged 65 and over with the following characteristics:

in receipt of income support or pension credit;

in receipt of attendance allowance;

living in rented accommodation; and

living alone in a household.

The sparsity top-up is calculated using data on the population sparsity of those aged over 65.

The variable in the current top-up for low income from fees and charges is the proportion of older people living in rented accommodation. This is the only part of the funding formulae that is calculated internally by departmental analysts, and the analysis has recently been re-run using the latest data. The resulting two options will be included in the Department for Communities and Local Government’s Formula Grant Distribution Consultation over the summer.

The area cost adjustments for older people and younger adults are calculated by the Department for Communities and Local Government (DCLG) to take into account the differing costs of providing adult social care by area.

The younger adult’s formula consists of a basic amount per person aged 18-64 and top-ups for deprivation and area costs. The variables included in the deprivation top-up are:

the proportion of people in receipt of disability living allowance aged 18-64;

the proportion of people who have never worked or are long term unemployed;

the proportion of people in routine occupations; and

the proportion of households with no family.

The DCLG have responsibility for the overall local government finance settlement.

Central Government, following consultation with local government and subject to parliamentary approval, determines the relative needs formulae based on the results of the research and analysis.

To ask the Secretary of State for Health what assessment he has made of the likely impact of recent changes in the NHS capital expenditure budget. (150828)

The capital expenditure budget for 2007-08 has been adjusted to reflect latest forecasts of expenditure for the year from the national health service. Therefore, recent changes in the NHS capital expenditure budget have had no impact on the NHS capital expenditure programme.