The Better Care Fund's (BCF) early preparation and planning did not match the scale of the plan's ambitions, a report from the National Audit Office (NAO) has found.
The BCF is designed to improve services for the elderly and disabled, encouraging care in the community and avoiding long hospital stays.
The early plans for the BCF, which will be funded from £5.3bn of existing NHS and local authority funding in 2015-16, did not produce the level of savings expected or meet expectations, the report found.
The minimum amount to be pooled for the better care fund is £3.8bn, compared to £5.3bn local areas planned for, with £1bn already spent around the planned assumption of savings.
NHS England, which expected to deliver £1bn of savings as a result of the BCF, said it now expects the plans to deliver £55m of savings.
In April 2014 planning for the BCF was paused with new plans to be submitted by September following the changes which had to be made to the BCF's scope, governance and programme management.
The BCF is due to start in April 2015.
Of the 151 health and wellbeing boards in England, 146 have had their plans for the BCF approved, 6 were approved without needing some changes.
Amyas Morse, head of the National Audit Office, said: "The Better Care Fund is an innovative idea but the quality of early preparation and planning did not match the scale of the ambition.
"The £1 billion financial savings assumption was ignored, the early programme management was inadequate, and the changes to the programme design undermined the timely delivery of local plans and local government's confidence in the Fund's value."
Cllr Izzi Seccombe, chairman of the LGA's Community Wellbeing Board, said: "This report fails to recognise the significant work that councils and local health organisations have had to undertake to make sure that vulnerable people do not suffer at the hands of last minute government changes to the Better Care Fund.
She added: "It is obviously too soon to conclude about the success of the Better Care Fund at this stage."