Ministers alarmed by the mounting debt levels of primary care trusts (PCTs) should re-examine how they fund PCTs instead of pointing fingers at local NHS managers. That's the conclusion of a new study suggesting that the financial problems are linked to geographical factors - and Whitehall's failure to account for them.

The difficulties of providing rural healthcare and the tendency of affluent communities to demand more of their GPs are the key causes of PCT debt that have gone unheeded, says the team led by a Cambridge University academic, Padmanabhan Badrinath, of the university's medical school. He worked with managers at Suffolk West PCT to compare the 29 most debt-ridden PCTs in England with the 29 most in surplus.

Those with the biggest surpluses, surprisingly, were in deprived, inner-city communities with low employment, educational status and life expectancy; while those in deficit were virtually all in rural and sometimes affluent areas. The researchers say this shows the divide cannot be down simply to bad management.

The study will make uncomfortable reading for a government that has done little to disguise its discontent with the performance of PCTs, or its keenness to replace poor performers with private sector managers.

"The Department of Health thinks the PCTs have not been doing their job properly - though I've never seen any good evidence for this," says John Appleby, chief economist at the King's Fund thinktank.

The latest study suggests that rather than seeking to bring in private management teams, the government should reconsider how it allocates resources to existing ones.

The study was based on 2004/5 figures, the most recent year for which complete figures were available. It found no difference between the top and bottom 29 PCTs in the proportion of older people they looked after. Significantly, there was little difference in the star ratings that PCTs had been awarded by the Healthcare Commission, indicating poor management was not to blame for differing financial fortunes.

However, the average population density was seven times lower among the in-debt PCTs compared with those in surplus. In addition, the PCTs in deficit received on average £123 less per head of population than the PCTs in surplus.

A Department of Health spokesman says the existing allocation formula is designed to fight health inequalities, but he denies that it is stacked against rural communities: "You can always find patterns if you look hard enough."

Michael Dixon, chairman of NHS Alliance which represents PCTs across the country, insists, however, that the allocation system remains biased against rural areas and says the findings confirm his own suspicions. Dixon, a GP in Devon, says: "There has not been a proper allowance for the extra problems of providing primary care in rural areas. If a GP or nurse has to drive 10 miles to see a patient, that will cost more. If the GP has to dispense medicines because there are no other local services, that will cost more, too."

Even officials at Heart of Birmingham PCT, one of the 29 trusts with the biggest surplus, admits that there are factors at play that help inner-city trusts balance their books. "People in deprived areas never use health services as much as the middle classes in more affluent areas," says its chairman, Ranjit Sondhi. "Poorer people, even though they tend to suffer more ill health, seek less treatment."

So could some of the money aimed at primary care in poorer areas be better spent on education and housing - factors that are known to influence the health of deprived communities?

"This is a crucial point," says Sondhi. "We should not be taking money away from deprived areas; instead, we should be spending the money better."

"We're certainly not suggesting money be taken away from deprived inner-city areas," says Rosemary Currell, health intelligence manager at Suffolk West PCT. "But we are saying there are also pockets of serious deprivation in rural areas - and that these get overlooked."

The team only surveyed the most in-debt and most in-surplus PCTs, and the authors admit that their study may have been unrepresentative.

Appleby says bad management in rural areas could explain the disparity. "Perhaps these areas are not attracting the most dynamic, young managers because they are seen as less of a challenge."

Currell believes the geographical differences are too striking for it all to be down to bad management. "This pattern exists and it should be investigated further."

· For more on the NHS financial crisis go to SocietyGuardian.co.uk/publicfinances