Remuneration – rurality

An independent report has identified that higher costs of service delivery in rural areas are related to the following factors:

• longer staff travel times
• higher staff travel costs
• diseconomies of scale (both as a provider or user of services)
• lack of alternative services.

Other costs may relate to lack of network connectivity, higher overall staff costs and low-volume order surcharges.

NHS funding allows for unavoidable variations in costs related to geography and demography (age). However, a 2019 review suggests these adjustments may not be sufficient for the financial health of rural health services. The Scottish Parliament has also recognised that NHS funding for medical services in rural areas is subsidised by dispensing income.

For more information

Fair Shares – a guide to NHS allocations: NHS England

Costs of service delivery in rural areas: NHS England

Rural health care: A rapid review of the impact of rurality on the costs of delivering health care: Nuffield Trust

Scottish Government official report June 24 2014. Col 5732. Health and Sport Committee