House of Commons - Public Health England's grant to local authorities

Public Health England's grant to local authorities - Public Accounts Contents

1 Central government policies and the grant to local authorities

1. On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department of Health (the Department), Public Health England (PHE) and the Association of Directors of Public Health about Public Health England's grant to local authorities.[1] Public health is about helping people to enjoy good health and protecting them from threats to their health. Protecting and improving health and wellbeing creates a more economically and socially active population and reduces the burden on the NHS and the economy.[2]

2. The Health and Social Care Act 2012, implemented from 1 April 2013, made fundamental changes to the system for funding and delivering public health. Responsibility for commissioning local public health services returned to local authorities from the NHS. Local authorities now have a statutory duty to improve the health of their populations. The Department is responsible for public health policy. It created a new expert national executive agency, Public Health England.[3]

3. PHE is intended to have an authoritative voice on all public health issues. It provides advice and evidence to others on what works best in protecting and improving public health as well as directly providing a range of central services, such as social marketing campaigns and health protection actions. PHE will be held accountable for securing improved public health outcomes and in October 2014 it set out its 7 priorities, 5 of which focus on health improvement. These are obesity, smoking, harmful drinking, best start for children, and dementia. In 2013-14 PHE gave local authorities £2.7 billion (£2.8 billion in 2014-15) via a ring-fenced grant to carry out their new public health responsibilities. Much of this expenditure is constrained in the early years by contractual commitments for services signed by predecessor authorities.[4]

4. Before the transition the Department estimated Primary Care Trusts' (PCTs) public health spending to establish a baseline for the first public health grant. The Department told us that prior to the transition it did not know how much money was spent on public health as there had been no widely accepted definition of what constituted public health spending. The amount formed part of a wider single allocation given to PCTs.[5] The baseline exercise revealed significant variation in PCT's spending on public health. In the first year, the Department ensured that all local authorities had increases in public health spending. The Department told us that this is because it wanted to ensure that local authorities had sufficient funds to continue the contracted services they inherited from the NHS. Overall public health funding increased by 5.5% in 2013-14 and then a further 5.0% in 2014-15.[6]

5. Basing the public health grant on previous spending means many local authorities are not receiving the proportion of public health funding that fairly reflects their needs. The Department uses a formula devised by the Advisory Committee on Resource Allocation (ACRA) to calculate the target funding proportion that each local authority should receive for public health. The formula is based on area population with an adjustment for relative health needs based on factors such as mortality under 75. In 2013-14, 51 of 152 local authorities were more than 20% above or below their target funding allocation. The Department tried to improve fairness by giving those furthest below their target larger funding increases to move them closer to target allocations. This resulted in movement towards target allocations in the first two years and the Department has made some progress for those local authorities which were most under target; in 2014-15, 13 local authorities were more than 20% below target, compared with 20 (out of the 51) in 2013-14. But for 2015-16 the Department has not increased its public health funding, leaving 41 local authorities still more than 20% from their target allocation. Significant movement will be required year on year to get those under target to reach their targets within a reasonable time.[7]

6. The Department told us that it is trying to help local authorities to get their fair share of funding.It told us that it is involved in discussions with PHE about the grant and that it has asked ACRA to review the public health formula. As well as looking at under-75 mortality, it has asked ACRA to consider public health priorities such as sexual health, alcohol and drugs and services for children ages 0-5, shifting the balance more towards younger people.[8]

7. PHE pointed out that the only way to move faster towards target allocations without increasing overall funding would be to take funding away from local authorities that had historically chosen to spend more on public health. But the Department and PHE had decided not to do this as they said total public health spending was only about 3% of health funding so they did not believe that any local authority had more funding than needed. The Department told us that public health funding after 2016-17 will be decided during the next spending review and we voiced concerns about the uncertainty this created for local authorities.[9]

8. Local authorities have some flexibility in how they spend the public health grant, although they are tied to contractual commitments, have to provide 6 prescribed services and spend their money in support of improving public health outcomes. We believe it was not intended that local authorities should spend their ring-fenced money on services they were already funding and providing from other budgets. We therefore asked how much of the ring-fenced money had been diverted to support services previously funded by local authorities, but neither PHE nor the Department could give us a figure. We commented that, if the ring-fenced funding had all been additional to existing local authority funding it could have been used to build up public health and to strengthen those objectives which PHE believes are key priorities.[10]

9. One justification for the Department's decision to ring-fence public health grants was to ensure that existing public health services passed smoothly from the NHS to local authorities. The ring-fence has also enabled local communities to see what local authorities spend on public health.[11] Protecting money with a ring-fence can be a good way of ensuring it is spent for the purposes intended but is now fairly unusual for central government to fund local authorities in this way. The Department told us that "the jury is out" over whether or not to continue to ring-fence public health funding to local authorities and that it will be for the new Government to decide. When making the decision the Department said it will look at qualitative evidence and the outcomes indicators from the first two years.[12]

10. PHE has a clear remit to present evidence on public health issues, using its professional judgement and authority even in controversial areas. For example, PHE has set out its positions on standardised packaging for tobacco and on sugar consumption. PHE told us that it is for the government to determine the policies, informed by the compelling evidence PHE provides. The Department has asked PHE to do an evidence-based review on minimum unit pricing for alcohol. The Department said it is keeping an open mind on the Government's policy position until it has seen the evidence.[13]

11. Wider public spending and policy, for example on housing, education, economic development and town planning are all important to people's health and wellbeing. PHE told us that it wants to influence all of the NHS and wider public spending, as the public health grant alone will not achieve enough.[14] The new NHS Five Year Forward View, published in October 2014, sets out a vision for the future health service and has a strong focus on public health.[15] However we were concerned about PHE's influence across Whitehall, especially where a government department may develop a policy that cuts through a public health priority. The Department told us that it works across government on public health, including through a cross-government group that includes relevant departments. PHE accepted that its work across government has not been as well co-ordinated or closely connected with its five priorities for health improvement as it should be, and that there should be a public health voice in major government departments. PHE plans to address this through attaching regional directors of public health to major government departments.[16]

1 C&AG's Report, Public Health England's grant to local authorities, Session 2014-15, HC 888, 17 December 2014 Back



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