'The Lansley policy is that an independent body should allocate resources to each PCT according to need, largely age-related; that health inequality budgets should be paid to directors of public health; and that the shift to a new weighted capitation formula should be done over several years to prevent budget cuts.'

Let us draw a dignified veil this week over the case of the ambulance crew whose excessive trust in satellite navigation systems allowed them to take a patient on a routine transfer from London to Essex all the way to Manchester before spotting that something was amiss. We all make mistakes. No harm seems to have been done.

But has the government made a serious mistake, or worse, in the way it calculates the weighted capitation allowance by which budgets are assessed for primary care trusts and others? The NHS's financial sat-nav system, as it were.

In one form or another the issue crops up whenever MPs of any party meet with ministers in private or across the Commons floor. The Tories are now seriously on its case and their analysis of ministerial error is on Patricia Hewitt's desk, awaiting an explanation.

Typical of current exchanges is Peter Bone, the businessman who captured Wellingborough in 2005. During recent health questions he complained that the former Northamptonshire Heartlands PCT was 9.9 per cent (£32m) below its proper capitation. It was the most embattled PCT in what former Leicestershire, Northamptonshire and Rutland strategic health authority chair Sir Richard Tilt called 'the worst-funded SHA relative to national capitation formula'.

Needless to say, the minister, Handy Andy Burnham, rattled off contrary statistics. When challenged by ex-health secretary Stephen Dorrell that the formula reflects 'political needs', not health needs, Mr Burnham insisted that what it seeks is 'to balance a range of factors'.

At that point in the session, Stephen O'Brien, the junior Tory health spokesman, pounced. He had been lying in wait (he told me so) to assert that 'his funding formula discriminates against elderly people' in areas like Northants 'because need is determined largely by morbidity and hence age'. Handy Andy bounced him off again.

When I tracked down Mr O'Brien he explained that his boss, Andrew Lansley CBE, had been so incensed by Ms Hewitt seemingly not understanding her own capitation formula, let alone theirs, that he and Tory HQ researcher Bill Morgan had dispatched a letter to the secretary of state, making some pretty basic challenges, essentially:

that Labour's formula gives equal weight to age-related need and deprivation, when the former is a much more important indicator of morbidity - 'the actual burden of disease' which costs the NHS the real money;

that Labour's claim that the Tory formula would give less to South Cambridgeshire (Mr Lansley's own patch) and even more to deprived inner cities is based on an error, a confusion between premature mortality rates (death under 75) and morbidity, the burden of disease;

a funding formula based solely on premature mortality rates would be perverse, adding to a mismatch of resources precisely because it would favour areas where the average age is younger (so many people having died young);

PCTs in deprived areas are not using their extra resources to tackle public health issues like high smoking rates, but to build unnecessary capacity such as beds (just what Ms Hewitt opposes).

The Lansley policy is now that an independent body should allocate resources to each PCT according to need, largely age-related; that health inequality budgets should be paid to local directors of public health, not to PCTs that will only redirect the cash; and that the shift to a new weighted capitation formula should be done over several years to prevent the current rash of budget cuts.

Mr O'Brien reminds me that rural areas, where much poverty goes unnoticed among green fields, suffer most from the current formula. But the sting in the Lansley tale lies in the current DoH trawl for research bids to review that formula. What flaws does Ms Hewitt acknowledge that they need reviewing? And when will it report? In time for the 2008-09 revenue allocations, a sensitive pre-election year in the Brown era?

Stop Press: I broke off writing this to bike over to my GP for a routine blood pressure check. At 138/86 it was fine by my standards. So the hot news is that patients have a new touch screen to log in, and nurse has a leather arm rest on which to take my BP. Fantastic. So that's where the£££s went!

Michael White is assistant editor (politics) of The Guardian.