Formula Funding of Public Services

The use of formulae has become widespread in recent years across most developed countries. In the UK, a conservative estimate is that annually £150 billion of public service expenditure is distributed using formulae, in services such as health care, local government, social security and higher education. This book offers a comprehensive introduction to the theory and practice underlying the use of such formulae as a basis for funding public services. The philosophy, design and economic consequences of funding formulae have become key policy issues worldwide. However, till now, there has beenno textwhich brings together the economic, statistical and political issues underlying formula funding. This key bookfills that gap. Written byaleading international expert on the design of funding formulae, this important bookincludes empirical evidence from a range of countries and will be a valuable resource for all those involved in this field.

1. Setting the Scene 2. Formula Funding within a Public Finance Framework 3. The Elements of Formula Funding 4. Formula Funding: A Production Function Perspective 5. Empirical Capitation Methods 6. Budgetary Risk and Formula Funding 7. Paying for Quality: The Case of UKGeneral Practitioners 8. The Political Economy of Formula Funding 9. Concluding Comments Technical Appendix B: Calculating Measures of Local Health Care Supply References'

Smith, Peter C.