A REVIEW of National Health Service funding is expected to channel cash into under-privileged areas in a departure from the existing targets-based formula.

Ministers had indicated that from next year money would be allocated according to hospital performance, but in a new move funding could now be diverted to poorer areas.

The NHS is to get £40bn funded by a one per cent rise in national insurance contributions from next April.

Ministers want to shift resources to areas where it is most needed, instead of allocating money according to hospitals' performance in relation to key targets. It is hoped that some of the funding will be awarded to the North-East.

In a report, conducted by the Office for National Statistics, it was found that Teesside and Sunderland feature in the ten least healthy districts of England. Other North-East areas featuring badly include Gateshead and South Tyneside, and Newcastle and North Tyneside.

At the Labour Party Conference, Lord Hunt, a health minister, signalled the Government's intention to move away from a reliance on targets.