Education and training budgets across England had to be revised down weeks before a reformed funding system was put in place, HSJ can reveal.

The changes came after Health Education England, the new national body for education and training, was told it would receive less funding than it had previously expected for 2013-14, HSJ has learned.

Under the reformed NHS system from April the Department of Health allocated money to HEE, which passes it to local education and training boards, which in turn commission those functions.

The changes mean the total funding for LETBs in 2013-14 is around £150m less than those running that organisation, and LETBs, had hoped for. They learned funding would be lower in the past two months, it has emerged.

It had been assumed LETBs’ funding would be based on the budgets, known as the multi professional education and training budget (MPET), which were given to strategic health authorities in 2012-13. In that year they totalled £4.879bn.

However, it has emerged that, instead, HEE’s allocation for 2013-14’ is based on SHAs’ actual 2011-12 spending on education and training, which was only £4.789bn. SHAs have often underspend their education and training budgets in recent years.

HEE’s budget for 2013-14 is £4.88bn – the £4.789bn uplifted by 2.6 per cent.

HSJ understands that, when HEE’s central costs for pay, contracts, and student bursaries are considered, as well as the gap in the expected allocation, there is a gap of around £150m between the budget it assumed it would be able to pass to LETBs, and what it now can.

As a result of the change, all LETBs have been given smaller budgets than they were expecting, and have been forced to make cuts to investment plans.

Board papers for a meeting of Wessex LETB on 3 June revealed the “national decision” on budget allocations had reduced its funding from an assumed £217m to £195m. Other groups have seen similar drops.

Council of Deans of Health chair Ieuan Ellis told HSJ: “Using outturn figures to set budgets will mean that areas that historically under-invested in education and training will receive less money and may perpetuate inequities in funding.”

HEE finance director Steve Clarke said: “There was a lot of hope that when the settlement came out to us we might see larger numbers. That was because in the past the workforce resources that had been distributed to SHAs had been traditionally underspent.”

He said the decision to base funding on the 2011-12 expenditure of SHAs had caused “a great deal of disappointment” among LETBs. He added: “It caused a lot of frustration in some areas and pretty much all [LETBs] have had to revise downwards their expectations.”

Mr Clarke said he was confident HEE would be able to meet its commitments but added: “Some of the more innovative projects will not be possible.”

A spokesman for the Department of Health said it was made clear to HEE in August last year how funding would be allocated adding the DH felt this was “most appropriate basis for the budget because it reflects the actual investment in education and training.”

They added: “The amount we are investing in education and training is increasing. Health Education England’s budget is bigger than the education and training budget was in 12/13. Having a strong national focus on this area will also help them to find smarter, more efficient ways of working and to use resources effectively.”