PATIENTS in the Westcountry are being short-changed by £200 million over the next two years, sparking warnings that the quality of care will be undermined, writes London Editor Matt Chorley.

Primary care trusts in Devon and Cornwall are on average receiving 4 per cent less than the Government's "fair funding" formula suggests they should, creating a "postcode lottery" of care.

Cornwall is 6.2 per cent worse off – the biggest gap in the country – worth £109 million by spring 2011.

The Department of Health insists substantial increases have been made to funding across the board which matter more than the shortfalls. Being a long way off target was an "advantage" because increases would be bigger in the future.

But official figures show the Westcountry is still significantly worse off than almost every part of the country.

Teignbridge MP Richard Younger-Ross said: "It is unfair that Labour ministers are allowing the gap between over-funded areas and under-funded areas to widen."

He warned that with the funding gap continuing, health services in the region could struggle to meet the needs of local people with the threat of staff and care being "rationed".

In total, 86 health trusts are being short-changed to the tune of £3.2 billion – exactly the same figure as the surplus enjoyed by 66 trusts in areas like London, Liverpool, Newcastle and Bristol.

The scale of the funding shortfalls is magnified by the huge sums involved. For example, Devon PCT is only 1 per cent below target but with a budget worth £1.1 billion, it will mean being shortchanged of £23.6 million over the period 2009-11.

NHS Plymouth is £50 million short over two years, an annual deficit of 5.9 per cent and Torbay is 3.4 per cent below target, leaving a £16.9 black hole.

Last December, the Department of Health announced with much fanfare that it was increasing funding for PCTs in the region. Cornwall was to receive an extra £94 million over two years, but the funding gap remains.

Despite long-running Westcountry campaigns, the Government has dismissed appeals for an increase in funding to meet the extra costs of providing healthcare in rural areas. A report found patients in the countryside were not at a disadvantage.

However, researchers at the King's Fund have warned local health services they "need to brace themselves for leaner times ahead". Chief executive Niall Dickson said: "The NHS has benefited from record levels of investment during the prosperous times and now needs to prepare itself for life on a tighter budget."

For the "foreseeable future", some areas would still receive more than their target budgets while others would continue to fall short. "The process and timescale for bringing PCTs' budgets in line with the formula has not been made clear."

Falmouth and Camborne MP Julia Goldsworthy said the figures were "overwhelming evidence which demonstrate how far behind rural areas are falling".

Truro and St Austell MP Matthew Taylor has previously warned "it could take years to eliminate the under-funding" which has been in place under both Conservative and Labour governments.

The story is repeated across the wider region. Somerset PCT is £40 million worse off over the next two years while Dorset is shortchanged by £7.4 million.

Last night, a Department of Health spokesman said: "What matters is not distance from target but the levels of increased funding PCTs are receiving.

"All PCTs in Devon and Cornwall are receiving substantial and above-average increases for 2009-10 and 2010-11.

"Cornwall is in the top 10 per cent of PCTs in the country in terms of the size of its increase. A greater distance from the targets – which move – is an advantage for a PCT because it means bigger increases in funding in future years."

NHS Plymouth finance director Ben Chilcott said the funding levels were "in line with our planning assumptions".

Torbay Care Trust said it had "a good understanding of its predicted long-term levels of income, expenditure and funding".

Dr Kevin Snee, chief executive of Devon Primary Care Trust, said that when adjusted for inflation, the county "will receive an increase in funding of 7.2 per cent over two years, above the national average of 6.7 per cent for England as a whole". But it would still be £23.6 million less than the Government's "fair funding levels" would suggest.

Sally May, director of finance at NHS Cornwall and Isles of Scilly, said: "Over the next two years, we will receive an increase in funding of over £94 million – a 12.4 per cent increase on this year's resources."