Fair Shares for All? The development of needs based governmental funding in education, health and housing

Ross Hendry

Published November 1998

Furthering equity as an achievable public policy objective is based on the ability to assess needs accurately, and distribute resources accordingly. This paper plots the development of the formulae governing resouce allocation in education, health and social housing, and charts their course as a tool with which governments attempted to achieve various objectives. The paper begins by suggesting that allocation systems can be explained through a form of public choice theory. It then charts the development of needs-based resource allocation from its origin in the nineteenth century, through the pre- and post Second World War period, and into the major flowering of needs-based formulae since 1970 - when resources were constrained and attempts were made to push allocation even further down and apply the formulae to smaller units. The conclusion looks at equity, public choice and technical ability as over-riding features governing the development of resource allocation within the English state sector.