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The fair allocation of resources for health and social care in relation to the needs of the population in different parts of the United Kingdom has become particularly important since the implementation of the new arrangements for community care in April 1993. These depend on close collaboration between health authorities and local authority social services departments. Yet funding reaches these authorities by different means and according to different criteria. Most health authority funds come through a weighted capitation formula that overemphasises the effects of age, while family health services funding is largely not cash limited and hence demand led. Funds to local authorities for community care are being transferred from the social security budget but on a basis that partly reflects past provision of residential and nursing home care. None of these mechanisms responds to underlying needs that give rise to demands on the health and social care system as a whole, and none makes any attempt to compensate for defects in the others. The solution includes better research and a unified weighted capitation system for all sources of funding.