Publication of Professor Townsend’s Final Report Inequalities in Health: The Welsh Dimension 2002-2005

This statement is to alert Members to the publication of Professor Peter Townsend’s final report – Inequalities in Health: The Welsh Dimension 2002-2005. Copies of the report will be placed in the Assembly Libraries.

Professor Townsend was commissioned by the Health and Social Services Committee in 2000 to review the arrangements for allocating healthcare resources between LHBs. His first report, “Targeting Poor Health”, was presented to the Committee in July 2001, and was adopted by the National Assembly in March 2002. The report proposed the introduction of a direct needs formula for allocating resources and made recommendations for action to improve health and wellbeing within and beyond the NHS ( the “Dual Strategy”) and to develop better information on the use of healthcare resources.

Following adoption of the report, Professor Townsend was invited to chair a Standing Committee to advise the Minister for Health and Social Services on the development and implementation of the formula and the other recommendations. The final report concludes this work.

Key Recommendations of the new Townsend Report

The key messages in Professor Townsend’s report are:

• Continued support for the direct needs approach to allocating NHS resources. The report recommends the extension of this approach to the prescribing budget in 2006-07, and a review of the impact of the GMS contract on distribution of resources to local health boards in line with needs. The report also recommends the establishment of an Expert Group to advise on further refinement of the direct needs model. The minister for Health and Social Services has already approved this recommendation. The Group met for the first time on 15 November. A paper on the group for noting by the Health and Social Services Committee will be presented in the New Year.


• The importance of action by local health boards to target the resources allocated to them to address inequalities within their areas, with support from the Welsh Assembly Government and the National Public Health Service.

• The report calls for a national health improvement plan, including shorter and longer term action, with local health boards translating the national vision into local action. The Welsh Assembly Government is already taking this forward through Designed for Life and Health Challenge Wales.


• The development of financial systems and processes to track resource use at an individual patient level. This recommendation could not currently be achieved by activity and financial information systems in the NHS. However, the Programme Budgeting initiative is partially addressing this recommendation, allowing LHBs to  analyse their existing baseline by disease group and scrutinise this against needs data.

• The report also recommends that the Assembly should act as an influential advocate to the UK government on the health impacts on the Welsh population of non-devolved matters, such as benefit policy.

• The report recommends that some of the issues raised during the consultation process regarding the sensitivity of the model to reflect health needs for certain sectors of the population should be considered in more detail by the Expert Group. However, it reasserts that  the existing model is substantially robust for allocating NHS resources on the basis of need.


The Welsh Assembly Government welcomes Professor Townsend’s report as an  innovative project to make the connections between the budget allocation process and Wales’ underlying health problems. The recommendations for more action to be undertaken at a local level and for continued action outside the NHS are particularly welcome and fit with the vision for improving health as set out in Wales: A Better Country, and Designed for Life. I plan to meet Professor Townsend in the New Year to thank him for his work.