On Christmas Eve 2002, the Department of Health published the financial allocations to Primary Care Trusts (PCTs) for 2003/4. As usual, this was accompanied by a detailed ‘exposition book’, setting out how the distribution of the available £45.3 bn was decided (Department of Health Finance and Investment Directorate, 2002). Three years ago, I wrote a short article showing how a close reading of this publication could be used to identify notional mental health budgets in these allocations (Reference GloverGlover, 1999). Bindman et al (Reference Bindman, Glover and Goldberg2000) demonstrated that many health authorities, particularly those that service more deprived areas, spend substantially less on mental health care. As this is the first time financial allocations have been made directly to PCTs, it is helpful to repeat that calculation for the new organisations.

The total resources available for the NHS are determined politically. Each PCT is allocated a share of this with which to meet the health care needs of its population. For the most part, the Department of Health does not identify sub-divisions in these allocations, and PCTs' discretion in using the money is largely unfettered. However, the formulae used to determine the share allocated effectively consider five distinct areas (including mental health) in which PCTs will need to spend. These are considered separately in the formula because their distributions around the country differ. If all PCTs were to use their resources in line with the formulae, their spending patterns would look very different; East Devon would spend 8.04% of its budget on mental health, while East Surrey would spend 20.13%. The figures for each PCT are shown in Table 1. East Surrey tops the league as a result of re-allocation of resources for the old long-stay patients of the Epsom cluster of mental hospitals.

Table 1.

2003/4 Total resource limits for Primary Care Trusts and amount and percentage attributable to hospital and community health services (HCHS) for mental health

Primary Care Trust	Mental HCHS £1000s	% of total	Total £1000s
Cheshire and Merseyside Health Authority (HA)
Bebington and West Wirral	9,798	9.82	99,784
Birkenhead and Wallasey	27,043	12.00	225,399
Central Cheshire	22,916	11.29	203,024
Central Liverpool	39,782	13.65	291,342
Cheshire West	13,817	10.12	136,582
Eastern Cheshire	17,320	10.73	161,425
Ellesmere Port and Neston	7,280	9.47	76,839
Halton	14,399	11.83	121,696
Knowsley	19,358	11.92	162,420
North Liverpool	14,737	12.31	119,751
South Liverpool	13,022	12.80	101,775
South Sefton	20,401	12.45	163,872
Southport and Formby	13,223	11.31	116,952
St Helens	20,354	11.14	182,712
Warrington	17,982	11.06	162,534
County Durham and Tees Valley HA
Darlington	11,122	11.41	97.490
Derwentside	9,508	11.42	83,267
Durham and Chester-Le-Street	14,317	10.95	130,724
Durham Dales	10,268	11.99	85,609
Easington	9,806	10.02	97,900
Hartlepool	11,165	11.91	93,717
Langbaurgh	10,399	10.85	95,826
Middlesbrough	21,409	11.92	179,612
North Tees	17,961	11.46	156,705
Sedgefield	10,007	11.05	90,565
Cumbria and Lancashire HA
Blackburn With Darwen	18,909	13.19	143,337
Blackpool	19,595	12.70	154,308
Burnley, Pendle and Rossendale	28,715	11.97	239,877
Carlisle and District	11,432	11.12	102,761
Chorley and South Ribble	19,658	11.37	172,858
Eden Valley	5,833	9.94	58,697
Fylde	6,527	10.24	63,715
Hyndburn and Ribble Valley	11,955	11.58	103,228
Morecambe Bay	32,589	11.17	291,800
Preston	18,700	13.01	143,699
West Cumbria	13,579	11.00	123,486
West Lancashire	11,528	11.81	97,616
Wyre	12,530	11.10	112,919
Greater Manchester HA
Ashton, Leigh and Wigan	34,763	11.85	293,331
Bolton	31,202	12.43	251,073
Bury	19,056	11.74	162,270
Central Manchester	28,979	15.58	185,987
Heywood and Middleton	9,002	12.28	73,321
North Manchester	25,113	13.61	184,492
Oldham	26,801	12.72	210,699
Rochdale	16,370	12.66	129,293
Salford	32,823	13.11	250,397
South Manchester	19,074	13.48	141,478
Stockport	30,178	11.91	253,371
Tameside and Glossop	27,587	12.62	218,588
Trafford North	11,246	12.64	88,995
Trafford South	12,163	11.09	109,671
North and East Yorkshire and Northern Lincolnshire HA
Craven, Harrogate and Rural District	17,016	10.25	166,090
East Yorkshire	12,143	10.08	120,493
Eastern Hull	15,172	13.00	116,700
Hambleton and Richmondshire	8,690	9.52	91,264
North East Lincolnshire	16,423	11.39	144,167
North Lincolnshire	14,310	10.70	133,772
Scarborough, Whitby and Ryedale	14,004	10.18	137,599
Selby and York	23,557	10.84	217,398
West Hull	18,806	12.57	149,648
Yorkshire Wolds and Coast	13,229	10.42	126,904
Northumberland, Tyne and Wear HA
Gateshead	26,339	12.84	205,181
Newcastle	37,143	13.23	280,787
North Tyneside	23,823	12.22	194,922
Northumberland Care Trust	32,691	11.61	281,575
South Tyneside	20,853	13.06	159,688
Sunderland Teaching	35,707	12.27	290,974
South Yorkshire HA
Barnsley	23,800	10.54	225,877
Doncaster Central	12,071	12.31	98,025
Doncaster East	9,819	11.46	85,707
Doncaster West	12,157	11.90	102,185
North Sheffield	16,077	12.58	127,814
Rotherham	23,987	10.54	227,557
Sheffield South West	12,337	11.15	110,614
Sheffield West	13,630	12.55	108,612
South East Sheffield	20,504	12.24	167,555
West Yorkshire HA
Airedale	12,039	11.63	103,484
Bradford City	20,135	15.27	131,851
Bradford South and West	16,689	12.64	132,051
Calderdale	20,671	11.43	180,860
East Leeds	17,983	11.81	152,221
Eastern Wakefield	20,173	11.58	174,251
Huddersfield Central	13,926	11.53	120,786
Leeds North East	17,398	12.77	136,255
Leeds North West	18,925	12.99	145,681
Leeds West	12,766	12.16	104,968
North Bradford	10,867	13.00	83,620
North Kirklees	17,570	11.88	147,930
South Huddersfield	7,023	10.40	67,509
South Leeds	17,205	12.48	137,895
Wakefield West	16,412	12.30	133,409
Bedfordshire and Hertfordshire HA
Bedford	14,427	11.93	120,974
Bedfordshire Heartlands	19,672	10.87	181,032
Dacorum	12,935	11.08	116,762
Hertsmere	9,019	11.57	77,939
Luton	20,051	12.79	156,783
North Hertfordshire and Stevenage	18,482	11.98	154,332
Royston, Buntingford and Bishop's Stortford	6,232	10.58	58,903
South East Hertfordshire	14,714	11.30	130,159
St Albans and Harpenden	11,713	11.07	105,836
Watford and Three Rivers	18,268	11.87	153,917
Welwyn Hatfield	9,715	11.43	84,991
Birmingham and The Black Country HA
Dudley Beacon and Castle	11,536	12.25	94,186
Dudley South	18,428	11.07	166,522
Eastern Birmingham	31,116	13.08	237,866
Heart of Birmingham	42,326	15.48	273,354
North Birmingham	16,387	11.43	143,426
Oldbury and Smethwick	14,067	13.77	102,171
Rowley, Regis and Tipton	10,528	13.26	79,391
Solihull	18,238	10.84	168,307
South Birmingham	47,196	14.15	333,648
Walsall	30,982	13.01	238,186
Wednesbury and West Bromwich	14,877	13.25	112,243
Wolverhampton City	29,356	12.86	228,234
Coventry, Warwickshire, Herefordshire and Worcester
Coventry	35,594	12.34	288,328
Herefordshire	13,535	9.66	140,098
North Warwickshire	15,898	10.89	145,995
Redditch and Bromsgrove	13,334	10.96	121,706
Rugby	7,874	10.76	73,156
South Warwickshire	20,770	10.83	191,845
South Worcestershire	23,279	10.72	217,159
Wyre Forest	9,558	11.01	86,799
Essex HA
Basildon	11,015	11.91	92,455
Billericay, Brentwood and Wickford	13,493	11.84	113,929
Castle Point and Rochford	12,329	9.51	129,591
Chelmsford	10,998	11.29	97,432
Colchester	14,877	11.55	128,776
Epping Forest	10,798	11.58	93,209
Harlow	9,635	12.31	78,245
Maldon and South Chelmsford	6,485	10.87	59,643
Southend-on-Sea	16,713	10.93	152,867
Tendring	14,790	11.40	129,742
Thurrock	14,763	12.38	119,272
Uttlesford	5,918	11.08	53,420
Witham, Braintree and Halstead Care Trust	11,821	11.61	101,820
Leicestershire, Northamptonshire and Rutland HA
Charnwood and North West Leicestershire	20,578	11.15	184,554
Daventry and South Northamptonshire	6,882	9.77	70,436
Eastern Leicester	21,918	15.23	143,941
Hinckley and Bosworth	7,731	10.68	72,385
Leicester City West	16,774	13.33	125,884
Melton, Rutland and Harborough	10,907	10.49	103,982
Northampton	19,210	11.22	171,247
Northamptonshire Heartlands	24,032	10.88	220,957
South Leicestershire	11,671	10.31	113,246
Norfolk, Suffolk and Cambridgeshire HA
Broadland	9,366	10.12	92,543
Cambridge City	11,905	11.42	104,205
Central Suffolk	6,468	8.92	72,548
East Cambridgeshire and Fenland	11,861	10.17	116,645
Great Yarmouth	9,884	11.66	84,777
Huntingdonshire	11,418	10.50	108,779
Ipswich	14,119	11.24	125,580
North Norfolk	9,438	10.54	89,552
North Peterborough	10,546	11.18	94,329
Norwich	14,549	12.03	120,956
South Cambridgeshire	7,840	9.99	78,487
South Peterborough	7,076	10.03	70,526
Southern Norfolk	16,245	10.32	157,485
Suffolk Coastal	7,350	9.18	80,053
Suffolk West	17,863	10.05	177,430
Waveney	10,546	9.44	111,682
West Norfolk	12,381	10.03	123,447
Shropshire and Staffordshire HA
Burntwood, Lichfield and Tamworth	12,521	10.91	114,739
Cannock Chase	10,874	10.88	99,977
East Staffordshire	10,146	10.57	95,947
Newcastle-under-Lyme	10,472	11.40	91,841
North Stoke	16,039	12.45	128,853
Shropshire County	24,801	10.78	230,088
South Stoke	15,027	11.81	127,248
South Western Staffordshire	14,269	10.09	141,467
Staffordshire Moorlands	10,133	11.02	91,971
Telford and Wrekin	14,251	11.53	123,588
Trent HA
Amber Valley	10,049	9.60	104,717
Ashfield	6,858	10.22	67,129
Bassetlaw	8,855	10.12	87,521
Broxtowe and Hucknall	11,411	10.06	113,472
Central Derby	16,458	15.18	108,422
Chesterfield	9,897	10.09	98,068
Derbyshire Dales and South Derbyshire	6,137	9.29	66,034
East Lincolnshire	25,115	10.47	239,940
Erewash	8,424	9.86	85,437
Gedling	7,367	9.29	79,311
Greater Derby	11,917	9.82	121,325
High Peak and Dales	8,601	9.84	87,399
Lincolnshire South West Teaching	14,531	10.15	143,190
Mansfield District	8,321	9.92	83,844
Newark and Sherwood	9,657	9.76	98,943
North Eastern Derbyshire	12,869	9.50	135,465
Nottingham City	33,434	12.21	273,890
Rushcliffe	8,273	8.95	92,448
West Lincolnshire	19,806	11.03	179,584
North Central London HA
Barnet	43,196	13.95	309,617
Camden	36,816	13.60	270,641
Enfield	29,602	12.15	243,574
Haringey	34,676	14.05	246,747
Islington	34,051	13.67	249,059
North East London HA
Barking and Dagenham	18,003	11.84	152,039
Chingford, Wanstead and Woodford	13,326	12.06	110,492
City and Hackney	38,202	14.28	267,490
Havering	21,308	9.96	213,922
Newham	39,623	14.22	278,603
Redbridge	20,025	12.45	160,850
Tower Hamlets	35,755	14.89	240,062
Walthamstow, Leyton and Leytonstone	23,534	14.23	165,368
North West London HA
Brent	44,137	14.97	294,906
Ealing	43,242	13.22	327,124
Hammersmith and Fulham	26,294	13.45	195,459
Harrow	24,228	13.43	180,391
Hillingdon	26,297	11.87	221,587
Hounslow	30,069	13.61	220,869
Kensington and Chelsea	27,803	13.56	205,096
Westminster	35,828	13.48	265,760
South East London HA
Bexley	19,563	10.67	183,314
Bromley	36,930	13.45	274,614
Greenwich	30,770	12.84	239,638
Lambeth	46,296	14.04	329,857
Lewisham	38,522	13.41	287,339
Southwark	38,761	13.61	284,695
South West London HA
Croydon	40,743	13.51	301,630
Kingston	18,165	12.44	145,966
Richmond and Twickenham	22,541	13.63	165,346
Sutton and Merton	46,880	13.99	335,186
Wandsworth	46,468	16.15	287,642
Avon, Gloucestershire and Wiltshire HA
Bath and North East Somerset	14,795	10.42	142,015
Bristol North	21,906	10.75	203,735
Bristol South and West	30,113	16.38	183,885
Cheltenham and Tewkesbury	13,362	10.78	123,964
Cotswold and Vale	15,925	10.02	158,933
Kennet and North Wilts	15,579	10.32	150,965
North Somerset	17,352	11.28	153,822
South Gloucestershire	27,551	14.88	185,115
South Wiltshire	9,768	9.76	100,106
Swindon	17,252	11.22	153,760
West Gloucestershire	20,186	10.75	187,752
West Wiltshire	8,849	9.77	90,549
Dorset and Somerset HA
Bournemouth	16,084	10.79	149,097
Mendip	8,569	10.30	83,181
North Dorset	6,625	8.88	74,628
Poole	14,288	9.81	145,712
Somerset Coast	11,916	10.25	116,205
South and East Dorset	11,625	8.82	131,863
South Somerset	12,514	10.04	124,612
South West Dorset	11,267	9.22	122,135
Taunton Deane	8,876	10.31	86,071
Hampshire and Isle of Wight HA
Blackwater Valley and Hart	11,880	9.21	128,976
East Hampshire	16,612	10.27	161,786
Eastleigh and Test Valley	10,716	9.69	110,575
Fareham and Gosport	17,842	11.64	153,330
Isle of Wight	14,204	10.72	132,508
Mid-Hampshire	13,045	9.65	135,193
New Forest	14,629	9.56	153,050
North Hampshire	14,862	10.07	147,617
Portsmouth City	19,169	11.59	165,393
Southampton City	24,032	11.62	206,816
Kent and Medway HA
Ashford	8,628	10.13	85,140
Canterbury and Coastal	15,645	10.46	149,606
Dartford, Gravesham and Swanley	22,451	11.37	197,490
East Kent Coastal	26,109	11.10	235,284
Maidstone Weald	21,047	11.32	185,973
Medway	25,685	12.16	211,147
Shepway	10,616	11.17	95,035
South West Kent	16,882	11.67	144,624
Swale	9,616	12.07	79,657
South West Peninsula HA
Central Cornwall	17,562	10.22	171,802
East Devon	8,414	8.04	104,592
Exeter	17,807	15.37	115,825
Mid Devon	6,971	8.58	81,203
North and East Cornwall	14,047	10.27	136,777
North Devon	12,495	9.61	130,069
Plymouth	25,746	11.16	230,757
South Hams and West Devon	8,506	9.46	89,935
Teignbridge	9,830	10.37	94,835
Torbay	13,876	10.78	128,764
West of Cornwall	15,522	10.79	143,918
Surrey and Sussex HA
Adur, Arun and Worthing	22,814	10.58	215,657
Bexhill and Rother	7,410	8.95	82,804
Brighton and Hove City	30,735	12.38	248,356
Crawley	10,360	11.35	91,274
East Elmbridge and Mid Surrey	42,361	17.47	242,428
East Surrey	29,658	20.13	147,297
Eastbourne Downs	18,254	10.22	178,619
Guildford and Waverley	19,630	9.92	197,969
Hastings and St Leonards	10,114	10.94	92,444
Horsham and Chanctonbury	8,124	11.40	71,244
Mid-Sussex	10,017	9.49	105,512
North Surrey	21,874	12.28	178,063
Sussex Downs and Weald	10,371	8.64	120,074
Western Sussex	18,716	9.87	189,596
Woking	18,680	11.85	157,653
Thames Valley HA
Bracknell Forest	9,372	12.06	77,694
Cherwell Vale	9,668	10.54	91,708
Chiltern and South Bucks	11,556	9.77	118,329
Milton Keynes	18,935	11.23	168,688
Newbury and Community	8,842	11.77	75,113
North East Oxfordshire	5,550	10.90	50,910
Oxford City	16,360	11.29	144,874
Reading	20,644	12.58	164,108
Slough	15,395	15.16	101,527
South East Oxfordshire	7,117	12.02	59,198
South West Oxfordshire	14,625	10.39	140,745
Vale of Aylesbury	15,651	10.80	144,940
Windsor, Ascot and Maidenhead	15,488	11.79	131,388
Wokingham	10,715	10.57	101,338
Wycombe	11,904	11.04	107,783
England total	5,367,596	11.85	45,312,830

How is this calculated?

A full explanation of this calculation and the assumptions underlying it is beyond the scope of this short article (Reference GloverGlover, 2003). However, the principles are as follows. The resource allocation process starts by identifying the ‘weighted population’ that is the responsibility of each PCT. For hospital and community health services (HCHS), the population is assigned four weightings. These are for:

1. 1) Age profile (older people require more spending than young adults)

2. 2) Health need (areas where the population is likely to be sicker need more)

3. 3) Market forces factors (in some areas anything is costlier)

4. 4) Emergency ambulance costs (allowing for geographic influences)

The health needs relating to mental health care (not including learning disabilities) and other types of care are calculated separately, allowing parallel analyses. For prescribing costs, effects of age and sex profiles, proportions exempt from prescription charges and some specific types of morbidity are calculated. For cash-limited general medical services costs (GMSCL), age, Jarman scores, rates of limiting long-standing illness and market forces factors are considered and for HIV/AIDS, infection rates are used. To arrive at an appropriate single figure combining these elements, the department looks to the most recent available national spending profile for a weighting of the proportion of allocations that should follow each set of needs weights.

Having identified a fair share (or ‘target’) of the available national resource for each PCT, this is compared with what was available to the PCT area in the previous year and a set of rules is devised for the speed at which it is realistic to move individual allocations towards the target. For 2003/4, every PCT will get an increase of at least 8.33%. None will be left more than 10% under its target, but with the constraint that none will be pushed closer to its target share by more than 2%. (This leaves nine PCTs at 10% or more below target — Easington, -20.23%, Tendring, -15.05%, Knowsley, -14.91%, Barking and Dagenham, -14.70%, Ashfield, -12.82%, North Liverpool, -12.51%, Central Liverpool, -10.61%, Heart of Birmingham, -10.55% and Tower Hamlets, -10.00%.)

Finally, two types of further adjustment are made. Additions are made of new allocations to address specific issues (this year these are hospital weighting lists, new cost of living increases, out of hours improvements for general practice and the cost of taking on prison health care). Redistributions between PCTs are made where individuals are treated outside the PCT responsible for them (the largest of these is for mental illness and patients with learning disability institutionalised prior to 1970).

To calculate the figures shown in Table 1, all these steps were followed from the Department of Health spreadsheets, the only difference being that the allocations for the clinical areas were kept separate. Where additional allocations and distributions relate to one clinical area, these were attributed accordingly. Otherwise, they were applied to the general total. The resulting total figures are the same as those for PCTs 2003/4 Resource Limit (row L in the DH Initial Resource Limit spreadsheets).

What does it mean?

The actual task confronting PCTs in determining how to spend the resources allocated to them is, of course, much more complex than to be calculable on a few spread-sheets. Established patterns of spending cannot be overturned in a short period. Local profiles of buildings and other relatively fixed elements make particular services more or less efficient in ways that cannot be quickly altered. Rising or falling population numbers give rise to over- or under-use of facilities, with inevitable consequences for unit costs. Finally, national allocation rules can only really allow for influences that have a broadly national effect. Because of this, local decisions need to be made to take into account additional or differing influences.

The department's resource allocation team goes to considerable lengths to calculate the fairest possible share-out of resources, but it is national policy that the use of local resources is at the discretion of PCTs. Thus, it would be difficult for the department to publish the type of analysis presented here, which could be seen as fettering local discretion. However, given the thoroughness of the work they undertake, it seems appropriate to present this perspective as at least one element that PCTs should be thinking about in reaching the important decisions they have to take.