Background Funding for substance misuse services comprises one third of Public Health spend in England. The current allocation formula contains adjustments for actual activity, performance and need, proxied by the Standardised Mortality Ratio for under-75s (SMR<75). Additional measures, such as deprivation, may better identify differential service need.
Methods We developed an age-standardised and an age-stratified model (over-18s, under-18s), with the outcome of expected/actual cost at postal sector/Local Authority level. A third, person-based model incorporated predictors of costs at the individual level. Each model incorporated both needs and supply variables, with the relative effects of their inclusion assessed.
Results Mean estimated annual cost (2013/14) per English Local Authority area was £5,032,802 (sd 3,951,158). Costs for drug misuse treatment represented the majority (83%) of costs. Models achieved adjusted R-squared values of 0.522 (age-standardised), 0.533 (age-stratified over-18s), 0.232 (age-stratified under-18s) and 0.470 (person-based).
Conclusion Improvements can be made to the existing resource allocation formulae to better reflect population need. The person-based model permits inclusion of a range of needs variables, in addition to strong predictors of cost based on the receipt of treatment in the previous year. Adoption of this revised person-based formula for substance misuse would shift resources towards more deprived areas.