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How NHSG is funded

How we are funded

NHS boards in Scotland are allocated funding using the Scottish Resource Allocation formula. This was developed between 2005-2007 by the NHSScotland Resource Allocation Committee. This group was also known as NRAC and you may have heard the term NRAC being used by us, or in the media, to describe how we are funded. 

This formula divides the total NHSScotland budget – the money set aside by Scottish Government – between the 14 territorial health boards. It starts with the number of people resident in each NHS board area, then makes adjustments for the: 

  • Age and sex profile of the NHS board population 
  • Additional needs based on illness rates, and life expectancy and circumstances (including deprivation) 
  • Excess costs of providing services in different geographical areas 

The table below illustrates the funding NHS Grampian receives in comparison to all other Scottish health boards (Public Health Scotland: Resource Allocation Formula (NRAC) - Target shares for NHS Boards for 2025 to 2026 - Resource Allocation Formula (NRAC) - Publications - Public Health Scotland) 

nhsgfundingindex.JPG

Over the last 5 years, we have seen the highest percentage increase in our older population across Scotland - a 9% increase in over 65s. This increase is driving much of the extreme pressures within our Health Board and our Health and Social Care Partnerships. The overall size of population has also increased over this period, predominantly in the over 65 and the 0–17-year-old age groups.  

During the same period our working age population has reduced by 1%. This reduction, at a time when populations in some other health boards, notably both NHS Lothian and NHS Greater Glasgow and Clyde, have increased, has led to a significant reduction in our overall funding from NHS Scotland. 

The additional funding we receive to reflect the additional costs associated with older people requiring greater NHS resources, has been swallowed up by our reduction in overall population share. 

Published: 07/04/2025 09:56