Funding is allocated to primary care trusts (PCTs) on the basis of the relative needs of their populations. A weighted capitation formula is used to determine PCTs' target shares of available resources, to enable them to commission similar levels of health services for populations in similar need.
The Advisory Committee on Resource Allocation (ACRA) oversees the development of the weighted-capitation formula. ACRA is an independent body which has national health service management, general practitioner, and academic members. It commissions research to measure the health needs of PCTs.
The health need element of the formula, which informs the revenue allocations to PCTs in 2006-07 and 2007-08, was based upon research carried out by the allocation of resources to English areas (AREA) research team in 2001-02 and by Warwick university. The AREA research modelled need for all areas in England, and as a result a national formula was developed. A detailed description of the research techniques and the formula are published on the Department's website1, 2 at:
Generally, the data used in this research were based on full population datasets (for example, the National Census). Statistical sampling was not required in those cases. The significant exception was the Health Survey for England (HSE). HSE data for 1994-2000 inclusive were used and this provided a national sample size of 122,488. More details of the techniques used are provided in the document listed at point 2 as follows.
1 “Resource Allocation: Weighted Capitation Formula: Fifth edition” (Department of Health).
2 Allocation of Resources to English Areas; Individual and small area determinants of morbidity and use of healthcare resources (Sutton M, Gravelle H, Morris S, Leyland A, Windmeijer F, Dibben C, Muirhead M) Report to the Department of Health. Edinburgh: Information and Statistics Division, 2002.