20 Not Addressed

Provide detailed statement on NHS funding allocation formula for rural mental health needs.

Recommendation
We welcome the Government’s commitment to provide more funding for mental health and to ensure local mental health spending increases by the same proportion as overall increases in local health funding. Despite this, we are concerned by the possibility that the system used by NHS England to allocate funding fundamentally disadvantages rural areas. The Government’s settled view is that the system is fair and balances a range of complex criteria. We consider more work to be needed to ensure that appropriate resources fully respond to rural communities’ mental health needs and reflect the additional costs that rural areas must carry as, if this is not the case, rural communities will remain disadvantaged. We are pleased the Government is working to address shortcomings in how rural deprivation is measured. However, we ask the Department to provide us with a detailed statement of the process and the formula, in reply to this report, upon which to seek assurances from an independent source such as the National Audit Office.
Government Response Summary
The government described how NHS England's weighted capitation formula for Integrated Care Systems already accounts for rural area costs, by factoring in population age, supply-induced demand, distance of services, and ambulance response times. However, it did not provide the detailed statement of the process and formula requested for independent assurance.
Paragraph Reference
143
Government Response
Not Addressed
HM Government Not Addressed
In order to address health inequalities, NHS England (NHSE) allocates funding to each Integrated Care System using a weighted capitation formula based on the size of the local population and its needs. The formula takes account of the additional costs associated with rural areas in a few ways, including by factoring in population age, supply-induced demand, distance of services and the length of time it takes an ambulance to reach an incident. To allow for this, NHSE allocates funding to each (Integrated Care Strategy (ICS) using a weighted capitation formula based on the size of the local population and its needs. The formula takes account of the additional costs associated with rural areas in several ways, including by factoring in population age, supply-induced demand, distance of services and the length of time it takes an ambulance to reach an incident.
Timeline
Recommendation age 3.0 yrs
Report published 18 May 2023