Lewis Moody, a World Cup winner in 2003 and runner-up in 2007, will captain England on their voyage to New Zealand despite not yet being fully fit.
Scrum-half Simpson was promoted into Martin Johnson's 30-man squad after Danny Care injured his toe in England's World Cup warm-up defeat to Wales in Cardiff and was ruled out of contention.
The 23-year-old will travel as England's third specialist scrum-half behind Ben Youngs, who is back in training after a knee operation, and Richard Wigglesworth.
Johnson had considered taking only two scrum-halves to New Zealand, with Ben Foden and Flutey to provide emergency back-up.
But the ripple effect of England's decision to take three specialists ultimately left no space in the final squad, which is comprised of 17 forwards and 13 backs, for Flutey.
"The composition of the squad is very important and we think we have the right mix in the group," said Johnson.
"There were some very tough phone calls made last week. Everybody came into this camp and worked extremely hard and some players have just missed out.
"For us now though it is important to look forward - there is a great sense of unity in this group and we are pleased with the depth across the squad.
"We have a number of leaders and experienced players and have named Lewis Moody as squad captain. We are confident he will play a pivotal role for us in New Zealand."
While Flutey would have offered a ball-playing presence in midfield and the versatility to cover both fly-half and scrum-half, England have opted for four heavy-duty centres.
Leicester powerhouse Manu Tuilagi, who made a try-scoring debut against Wales at Twickenham, has made the final cut along with Mike Tindall and the versatile Matt Banahan.
England will travel with Shontayne Hape as their only recognised inside centre, which could open the way for Toby Flood to see some action in the 12 jersey.
Flood and Jonny Wilkinson are the only fly-halves in the squad, Mark Cueto and Chris Ashton the only recognised wings.
Banahan and Simpson are both able to fill in out wide while full-backs Foden and Delon Armitage complete a 13-strong backs contingent.
Up front, England have opted for five props - Dan Cole, Matt Stevens, Andrew Sheridan, Alex Corbisiero and David Wilson - and four locks.
Dylan Hartley, Steve Thompson and Lee Mears were confirmed as the three travelling hookers after phase one of the England's summer training camp, when George Chuter was cut from the squad.
Johnson had been considering taking only three locks and utilising Tom Croft or Nick Easter as an emergency second row but England have decided to take four.
Veteran Simon Shaw has been picked alongside Courtney Lawes, Louis Deacon and Tom Palmer, leaving only five back-row places available.
Moody, who is on the way back from a knee injury, is joined in the back row by Easter, Croft, Tom Wood and James Haskell, leaving no room for the specialist open-side flanker Hendre Fourie.
Gilbert has released a new line of rugby cleats. The Gilbert Virtuo 8S is part of the exciting new product. Check it out.
The entire All Blacks apparel line has been updated for 2013/14. Check out the New Zealand All Blacks polo.
The Nike Tiempo is a solid rugby cleat and one of few styles still made from full-grain natural leather.
The Gilbert Blitz 8S rugby cleat is a great cleat at a great price of $69.99. Get a new pair of cleats today.
A cool looking all black rugby cleat with the high performance adidas is known for. Get in the Gear!
Wear the crest of the British and Irish Lions on your t-shirt. A great look for the summer.
The All Blacks Performance t-shirt is black with hints of blue from the training jersey. Very Cool.
The New Zealand All Blacks training jersey for 2013/14. Get in the Gear!
The USA Rugby Pro Alternate rugby jersey is perfect for any fan of the Eagles. Get yours to wear during the summer Test matches.
The NEW All Blacks 2013/14 jersey has arrived at World Rugby Shop. Dare to wear the colors of the All Blacks.