Background: The York resource allocation formula includes a calculation of the amount needed to purchase mental health services equitably in each health authority in England. However, the amount which is actually spent on services is at the discretion of the authority.
Aims: To compare expenditure on mental health services with allocation, and test the hypothesis that differences between them are to the disadvantage of services in deprived areas.
Method: A comparison of routine expenditure and allocation data, and linear regression modelling of the ratio of expenditure to allocation.
Results: The ratio of expenditure to allocation varies widely. Relative underspending occurs more frequently in deprived areas, although not in the four inner-London health authorities.
Conclusions: The intentions of the York formula are not achieved in practice. The implications of the formula for mental health should be made explicit to health authorities, and shortfalls in mental health expenditure relative to allocation should be justified at a local level.