Some of the most deprived areas outside London are spending well below the money nominally allocated for mental health services, according to a national survey by researchers at the Institute of Psychiatry.

The underspend is further disadvantaging areas with already high levels of socio-economic deprivation, say the authors of the research in this month's British Journal of Psychiatry. It also throws into question the funding formula used to decide how much health authorities should receive for mental health provision.

Dr Jonathan Bindman, senior lecturer in community psychiatry at the Institute of Psychiatry, London, says cities such as Birmingham and Manchester are among those authorities spending well below the amount nominally given to them for mental health, based on the York formula for determining mental health needs in the area.

The York formula was adopted by the NHS Executive in 1995.

Based on the researchers' estimate of how much of the annual resource allocation is nominally for mental health services, Birmingham spent£7.1m less and Manchester£8.1m less.

But to the surprise of the researchers, the study shows that spending on mental health services in inner London far exceeds the amount the York formula suggests should be spent.

Lambeth, Southwark and Lewisham spent£97.3m -£18m more than it was nominally allocated. Kensington, Chelsea and Westminster spent£52.6m -£14.5m more.

Dr Matt Muijen, director of the Sainsbury Centre for Mental Health, was dubious about the findings. 'It all rings true, apart from this reliance on the York formula. If it is so blatantly inaccurate, some thought should be given to this. Maybe it is not the right formula.'