Resource Allocation by Regression in the National Health Service: A Critique of the Resource Allocation Working Party's Review

This paper examines the recent review of the Resource Allocation Working Party formula for allocating resources to the regions in the National Health Service from which the current formula‐is derived. Increasingly public resources are allocated by means of formulae which are based on multiple‐regression techniques which attempt to model ‘need’. The paper highlights some of the statistical and methodological problems in developing such formulae using resource allocation in the National Health Service as a case study. The statistical approach of the review is subjected to a rigorous critique and ways of improving the method are suggested. The paper then explores the limitations inherent in this type of modelling methodology. It is argued that there are real problems in attempting to translate technical or scientific models into public policy. This is compounded by the fact that regression techniques are often used by policy makers to give the impression of neutrality while pursuing political ends. The fundamentally political nature of the choice of need indicator must be acknowledged.