Department for Communities and Local Government officials are battling for a £3.8bn health and social care fund to be weighted more heavily towards deprived areas, in order to address criticisms that cuts have hit these places hardest, HSJ sister title LGC has reported.

Officials at the department are said to be calling for the Better Care Fund, a pooled budget for CCGs and councils to join up health and care services, previously known as the Integration Transformation Fund, to be shared using the formula used for local government grant allocations rather than one which has been used in the past for NHS funds.

This is because the local government formula would place greater emphasis on deprivation, it is understood.

It comes in the wake of a fierce debate about whether councils in deprived areas have been hit hardest by cuts. Last month the Audit Commission and the Joseph Rowntree Foundation published separate reports claiming this had been the case.

But local government minister Brandon Lewis strongly denied these claims, saying the JRF report was “wrong” because “the independent House of Commons library has already shown that deprived areas continue to receive and spend far more funding per household than other parts of the country”.

Mr Lewis also told the Commons local government committee this week that his department’s funding allocations were “fair to north and south, rural and urban” areas. He said he had seen no evidence of deprived areas being disproportionately hit.  

The plan to use the local government formula for the £3.8bn fund faces resistance from some Department of Health officials, LGC understands, who want to allocate the budget using an NHS formula.

Such formulas tend to place a greater emphasis on age, meaning they could see funding redistributed from deprived urban areas to rural areas with older populations.   

Details of the fund’s allocation are expected to be announced next week, alongside the local government finance settlement. The £3.8bn fund forms an important part of the DCLG’s calculation that local government spending will fall by just 2.3 per cent in 2015-16.

A letter to council chief executives from the LGA and NHS England, sent in October, said that in 2014-15 the funding would be allocated along historic lines. However, it said, allocations for 2015-16 – the first year in which the full pooled £3.8bn budget comes into effect – were “subject to ministerial decisions in the coming weeks”.

Many in the sector are keen to avoid a protracted debate about the distribution of the funding between local areas. Graeme McDonald, director of Solace, told LGC: “I’d hope there’s an uncontroversial way of sharing out the money, because otherwise it could make the real work of changing services much more difficult. Local areas need to be focussing on how they can use this money to make sure commissioning is done differently.”

A DH spokeswoman said: “The Better Care Fund will play an integral role in helping to ensure patients receive the care they need within their communities, and to reduce unnecessary emergency hospital admissions. Details on how the money will be allocated will be announced shortly.”

It comes as NHS England is expected to decide on the method it will use to allocate NHS funds to clinical commissioning groups - and to its own local areas - on Tuesday. It is expected to publish the allocations for 2014-15 and 2015-16 soon after.