The objective of this article is to analyse the way in which budget allocation decisions have been made in the National Health Service (NHS) of Britain. Despite the criticisms of the pre-1948 health care system on the grounds of geographical inequity, it was not until nearly twenty-five years after the service's inception that explicit allocation formulae were devised and implemented in an attempt to achieve equity, defined as equal financial resources for health care for those in equal need.
The article is divided into four sections; the first analyses briefly the establishment of the NHS in 1948 and the failure of policy-makers to rectify the significant inequalities in the distribution of health care inputs between the regions. The second section is concerned with the official recognition of the policy problem of geographical inequality in resources and the first attempt to rectify it. In the third section the most recent set of resource allocation formulae for England, Scotland and Wales will be analysed and compared. The final section offers some brief conclusions.