Oxygen Finance

Regional Health Funding: What’s Driving The Disparity in Healthcare Spend Between Different English Regions

Data generated by Oxygen Finance regarding the ‘per-capita spend’ in the Health and Social Care market by local government organisations, covering the period from October 2022 to September 2023, highlights an interesting trend.


The fact that these figures, when compared on a geographic basis across England, are the lowest in four specific areas: North West England, South West England, the West Midlands and the Yorkshire & Humber regions. And, in comparison to the highest per-capita spend areas – the East Midlands, the East of England, Greater London and the North East – these lower spend per capita numbers appear puzzling. And these nuggets of information brings us to the next question – why might this be?



On the surface, the presence of some of England’s biggest cities (outside of London) should result in a higher health/social care spend per person in the North West, South West, West Midlands and Yorkshire/Humber regions, as the larger population centres of Liverpool & Manchester, Bristol, Birmingham, Sheffield, Leeds and Hull have to contend with a range of urban issues such as air pollution, crime and deprivation. These factors would ultimately have an effect on the local healthcare system and an individual’s health and social care needs and should result in a higher per-capita spend in these areas. This theory is backed up through BMA research, which has concluded that “regions with lower levels of health may receive more health funding… as funding allocations for different geographical areas take the demography and health needs of the population into account”.


Delving into Oxygen Finance’s Insights Spend portal, these conclusions are firmly backed up. A search on Health & Social Care spending (across two specific categories – Adult Health & Social Care and Children’s Health & Social Care), over the October 2022 to September 2023 time period shows how local government organisations’ healthcare spending varies across different regions. Bodies in the higher healthcare per-capita spend regions (East Midlands, East of England, Greater London and North East England) spent a total of £717.54m; in comparison, the lower healthcare per-capita parts of the country (North West England, South West England, West Midlands and Yorkshire & Humber) spent almost £50m less during the same time period – £670.57m.



However, it is when you look at the age variation across the English regions that the bigger picture behind the low per-capita healthcare spend trend comes to light. Information contained in the 2021 Census shows that across the country, the greater proportion of people aged 65 and over reside in the North East, the East Midlands and the East of England.



This statistic highlights how these age groups have a greater requirement for healthcare – due to age-related conditions and illness – and as such, the respective regions would require greater spending per capita on their population’s healthcare needs. In comparison, the same Census figures show that regions in England with the lower age numbers – 15 to 34 years olds – are primarily based in the North West, West Midlands and South West regions. Again, this highlights why these areas spend less per-capita on healthcare, as the younger demographic would generally have fewer health conditions/illnesses and be fitter, healthier and more resilient, and would require fewer primary care interventions.


For some background, NHS England allocates financial resources to Integrated Care Boards, for spending on health and social care services within their region. These ICBs – which replaced Clinical Commissioning Groups through the Health and Care Act in July 2022 – became responsible for healthcare commissioning from this date and “are vital to the delivery of the NHS Long Term Plan”. For information, NHS England’s Fair Shares guidance document notes that NHSE distributes resources of over £110bn in revenue across the 42 ICBs, which represent over 60 million people. The body then uses a statistical formula to ensure the distribution of financial resources is “fair and objective” and “clearly reflects local healthcare needs”. This complex formula is described in detail in the Fair Shares document and takes a range of statistics – including population data, NHS budgets, historic spend, need and current priority figures – to calculate a target fair share for local areas. However, the Fair Shares document itself acknowledges that this model has its limitations and further work is required. Based on the obvious per-capita spend regional healthcare spend discrepancies highlighted in this document, I wouldn’t argue with that.

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