NHS Revenue funding flows from HM Treasury to the NHS Executive and onto NHS organisations. The NHS allocation from HM Treasury is supplemented by income from other sources, including land sales and donations from individuals and organisations.

From 1st April 2003 allocations are being made for three years rather than a single year, this will allow local health service organisations to plan over a longer term.

There are 4 elements that are used to set PCT actual allocations, these are, weighted capitation targets, baselines, distance from target and pace of change.

The key goal of current funding policy is to promote equal opportunity of access to health care for people in equal need. It aims to move PCTs towards their equitable share of funding as quickly as possible without destabilising the service.

A yearly planning process takes place in which budgets are set up for the new financial year. Current budgets are reviewed and in-year pressures identified as well as new developments costed. A review takes place at director level where decisions are made as to which pressures and developments are to be funded.

The PCT uses the Gloucestershire Shared Service Procurement Department to acquire the majority of its goods and services. Every contract for the supply of goods and services to or for the PCT should comply with the Trust's standing financial instructions and any EEC requirements.

Procurement thresholds have been set which govern which type of contract is to be used.

All purchases of goods and services where the estimated value is above £25,000 are subject to tendering procedures.

Competitive quotes are obtained where the estimated value is between £5,000 to £15,000, and non-competitive quotations for estimated values between £1k - £5k. Below the value of £1,000 there is no formal requirement to obtain quotations.