The overall allocations for the last full year of PCT budget control have been set at £89bn.
All PCTs will see an increase in their allocation, varying from a minimum 2.5% increase to a maximum of 4.9%.
The allocation growth includes a new £648 million fund to support joint working between health and social care.
Speaking to the health select committee, health secretary Andrew Lansley said the increases would be achieved by reducing management costs. ‘It provides a strong platform for 2011/12 and for the reforms,’ he said.
Mr Lansley continued: 'But in order to meet rising demands and deliver improving outcomes for patients, we need to get the best value from our protected health budget and make every penny count for patients.
'That means cutting out waste, reducing bureaucracy and simplifying NHS structures so that we are able to invest more in improving frontline care.'
The government said the increase demonstrates its 'commitment to protecting health funding in a tough financial climate'.
Previous allocations have seen PCTs receive a total of £8.6bn of additional funds in the two years to 2010/11, a rise of 11.3%.
Current PCT allocations for 2010/11 currently stand at just over £84.4bn.
The department has also revised the weighted capitation formula, a mathmatical tool used to decide the fair distrbution of the overall NHS allocation budget based on population size and need.
PCTs will receive a total of £85 billion under the allocations, equal to 80% of NHS funds.
In addition, PCTs will receive a total of £4 billion allocation for certain services such as dentistry and support for joint working between health and social care, which are not based on the weighted capitation formula.
Some PCTs remain far from reaching their target allocations as set by the capitation formula.
NHS Hammersmith and Fulham is 22.5% over target, meaning part of future budget allocations to the PCT will be redistributed to other PCTs that remain under target.
One such PCT is NHS Stoke on Trent, which is 5.5% below target. This PCT will receive a larger allocation in future to realign its buget allocation with that dictated by the capitation formula.