The NHS Commissioning Board has ordered an “urgent, fundamental review” of the NHS allocations process after concluding that the formula devised for deciding commissioning groups funding appeared “inconsistent” with the goal of reducing health inequalities.

In a statement released this morning, the board reported that it would give each clinical commissioning group a uniform increase of 2.3 per cent in 2013-14, instead of redistributing funds in accordance with the proposed formula.

It was published as part of the planning guidance for next year, called Everyone Counts: Planning for Patients 2013-14.

It said that the board had concluded “that the formula proposed by the [independent] Advisory Committee on Resource Allocation accurately predicts the future spending requirements of CCGs based on the pattern of need as it is being met from that particular budget”.

But it added that using the formula alone to redistribute funding “would predominantly have resulted in higher growth for those areas that already have the best health outcomes compared with those with the worst”.

It continued: “On the face of it, this appears inconsistent with the NHS Commissioning Board’s public purpose to improve health outcomes for all patients and citizens and reduce health inequalities.

“[The board] will therefore conduct an urgent fundamental review of the approach to allocations, drawing on the expert advice of ACRA and involving all partners whose functions impact on outcomes and inequalities.”

The review is to be completed in time for its initial conclusions to inform allocations for 2014-15.

In the meantime, the board said, all CCGs would get an “above real-terms uniform increase” in funding, which would give the new commissioners “stability in their first year”.

The statement said the board had allocated £65.6bn for commissioning by CCGs and local authorities – an “overall increase” of 2.6 per cent. Within that, the overall allocation to local authorities to support collaboration on social care will jump from £622m to £859m – a rise of 38 per cent.

CCGs get increases of just 2.3 per cent, compared with their share of primary care trust spending in 2012-13.

However, according to planning guidance the board published alongside the statement, CCGs will have to hold back 2 per cent of those allocations for one-off expenditure, as primary care trusts have had to do in recent years. They will be expended to “ringfence” those funds, and only make commitments against them following approval by local teams of the NHS Commissioning Board.

On top of this, they will be expected to hold a contingency fund of at least 0.5 per cent, to “mitigate risks within the local health economy”, and to plan for a surplus of at least 1 per cent for 2013-14.

The board’s allocation for the services it will commission directly – including primary care, specialist services, and prison and military healthcare – will be £25.4bn. The statement said this also represented a 2.6 per cent increase compared with 2012-13 spending.