Labour pledge to scrap NHS England in disarray as ministers consider setting up another quango in its place to take on staff on high salaries

Labour’s pledge to scrap NHS England is in disarray after ministers were advised to set up another quango to take on staff with high salaries.Wes Streeting announced in March last year that the government would abolish the ‘world’s biggest quango’ and return its functions to the Department of Health and Social Care.But ministers have now been asked to consider setting up an alternative body, described as NHS England 2.0, to take on many of its existing staff.Officials have warned new health secretary Yvette Cooper that the initial plan is unworkable because NHS England staff have far better pay and conditions than counterparts in her Department.NHS managers can earn up to £45,000 more than those doing their equivalent role in the civil service.Under government finance rules, Ms Cooper would need permission from the Treasury for each staff member's salary that exceeds the normal civil service pay level.She is expected to decide how to proceed before the legislation needed to enact a change comes before MPs next week.One option is to set up a new quango that would employ thousands of those currently working for NHS England. Officials have warned new health secretary Yvette Cooper (pictured) that the initial plan is unworkable because NHS England staff have far better pay and conditions than counterparts in her Department.A government source told The Times that NHS England staff would be brought into the health department but confirmed there were financial issues to work through.They denied a new quango would need to be created.The public accounts committee has said the abolition of NHS England has ‘chilling echoes’ of the troubled HS2 rail project.Under the merger about 9,000 staff were due to lose their jobs, but so far only 1,700 have departed - all via voluntary redundancy.A deadline of April next year had been set for the completion of the merger, which sources believe will be ‘impossible' to meet.NHS England employees at all levels earn more than those at the Department of Health and Social Care (DHSC) who do similar jobs, particularly in the most senior roles.For senior civil servants, the pay band is £86,000-£117,800, whereas for their equivalent grade of senior NHS England managers the salary range is £112,782-£129,783.At the rung below the most senior level, known as band 8 for NHS and grade 6 for civil servants, NHS England employees can earn up to £108,814, while those in the civil service would earn a maximum of £78,721. Former health secretary Wes Streeting (pictured) announced in March last year that the government would abolish the ‘world’s biggest quango’ and return its functions to the Department of Health and Social Care.Staff at NHS England are also able to progress through their pay band while in post, whereas civil servants typically stay stuck at the lowest point.According to the Health Service Journal, Ms Cooper and new Prime Minister Andy Burnham are less keen than their predecessors to centralise more functions within DHSC but do not want to U-turn on the formal abolition of NHS England.Siva Anandaciva, director of policy at the King's Fund, a health think tank, said DHSC and NHS England were ‘entirely separate organisations’, adding: ‘It is no surprise that merging them is proving so difficult.‘Abolishing the world's biggest quango is a big deal. You are talking about thousands of staff who will need to change jobs, change contracts and become civil servants.'The difference in pay scales, pensions and contract terms and conditions is a really difficult bureaucratic wrinkle to iron out... if you are going to merge without aligning pay scales, then people who are doing very similar jobs would have very different salaries.’He said this could mean a DHSC civil servant would know that a colleague in the same role who has moved from NHS England ‘may be earning significantly more’, breeding resentment.Mr Anandaciva said creating a ‘mini NHS England’ within the Department of Health would provide one solution, as it would allow for two cohorts on different pay scales.However, he said: ‘This is the sort of thing that should have been properly thought through before making the decision to abolish NHS England.‘From the beginning, there was a lack of clarity.‘Yvette Cooper is in a really difficult position. She was not the genesis of the idea to abolish NHS England, but is the one who will have to sell it and get the legislation through parliament.’Staff at NHS England were reassured that they will not face pay cuts under a system called Tupe, which stands for transfer of undertakings (protection of employment).However, their pay could stagnate for years and they may not be eligible for pay rises until their civil service colleagues' salaries catch up.A Department of Health and Social Care spokesperson said: ‘By stripping out the duplication and bureaucracy of two organisations doing the same job, the front line will get more resources to deliver better services… this will obviously mean a leaner, more agile centre, and we are working through the detail of those changes with affected staff.’