(2) at what rate trusts which have NHS funding (a) 1 to 5 per cent. and (b) over 5 per cent. (i) above and (ii) below target funding will be brought towards target funding over the next five financial years; and if he will make a statement.
Primary care trusts' (PCTs) target revenue allocations are made on the basis of a fair funding formula, recommended by the independent Advisory Committee on Resource Allocation, that directs funding towards areas of greatest need.
We are committed to moving all PCTs towards their target allocations as quickly as possible, but this must be balanced with the need to ensure that all PCTs are appropriately supported with stable funding that both supports existing commitments and allows long-term planning, as well as recognising the unavoidable cost pressures that all PCTs face.
The allocations for 2009-10 and 2010-11 achieve this by ensuring that:
average PCT growth is 5.5 per cent. each year;
minimum growth is 5.2 per cent. in 2009-10 and 5.1 per cent. in 2010-11;
no PCT will be more than 6.2 per cent. under target by the end of 2010-11; and
no PCT will move further under target as a result of above average population growth in 2010-11.
Further, we have ensured that the most under-target PCTs will benefit from the highest increases in funding. At the start of 2009-10, the most under-target PCT will be 10.6 per cent. below its target allocation. Over the next two years, that PCTs' allocation will grow by more than 17 per cent. and it will end 2010-11 only 6.2 per cent. below target. This is a significant achievement by historic standards: in 2003-04, the most under-target PCT was 22 per cent. below target.
The rate at which PCTs will move towards their target allocation in future years will need to be considered in light of a number of factors including population changes, cost pressures and the resources available to the national health service.
Compensation for PCTs that have received under-target allocations in the past would be difficult to determine as targets vary over time. It would effectively mean re-opening those allocation rounds, which would undermine stability of NHS funding and so long-term planning. Further, it could be funded only by reducing resources for other PCTs, which may result in painful cuts to services.