NHS and local government leaders have this morning announced plans to join up health and social care budgets for Manchester worth £6bn, but insisted the deal is not a ‘town hall takeover’ of health services.

A memorandum of understanding, which was leaked in draft form two days ago, has now been signed by 12 clinical commissioning groups, 15 NHS providers, 10 councils, NHS England, the chancellor George Osborne and health secretary Jeremy Hunt.

It will establish a new strategic health and social care partnership board to coordinate health and care planning across a population of around 3 million. Although an earlier draft of the memorandum suggested this new organisation would be a statutory body, that wording has not been included in the final version.

The agreement covers the entire health and social care system in Greater Manchester, including primary care and social care, mental health, acute and community services, and public health.

Although the draft deal said that the Greater Manchester Combined Authority would lead the regulation of health and care services locally, that wording has been changed in the final agreement, which states that the parties will work towards Greater Manchester playing a “clearly defined leadership role in the oversight of its provider community”, in “close partnership” with the regulators. Meanwhile, local trusts have also called for a “new set of relationships” to be established between regulators and NHS providers.

The relationship between the Manchester devolution project and NHS England’s “vanguard” programme for implementing new models of care has also been refined since the earlier draft of the agreement leaked. The draft deal said Manchester would be included in the vanguard of new care models being trialled in the NHS from this year. However, this morning’s memorandum states only that Greater Manchester “is committed to being an early implementer and a test bed for new, innovative approaches of delivering new models of integrated health and social care which reflect the needs of local populations”, without an explicit pledge regarding the vanguard.

George Osborne

George Osborne has signed the memorandum of understanding, along with Jeremy Hunt

The full governance arrangements for health and care services in Greater Manchester have not yet been detailed.

Lord Smith, chair of the Greater Manchester Combined Authority, said that while the agreement was unprecedented, it was not “as it has been wrongly portrayed in some quarters, a town hall takeover of Greater Manchester’s NHS budget”.

Instead, he said the authority would be working with NHS leaders in the region to make “joint decisions which reflect local priorities”.

Lord Smith added: “This is about decisions about Greater Manchester being taken in Greater Manchester in an integrated way, not being taken away from experts.”

Manchester City Council leader Sir Richard Leese told a press conference this morning that the new arrangement “will not deal with funding issues”, and that local leaders will “continue to make the argument for funding health and social care”.

The deal has been hailed today by NHS chief executive Simon Stevens as having the “potential to be the greatest act of devolution there has ever been in history of NHS”.

In a statement this morning, he said: “Strong and aligned local leadership in Greater Manchester means that now is the time for courage and for bold moves to deliver the ambitious agenda set out in the NHS Five Year Forward View.

“Today’s landmark agreement charts a path to the greatest integration and devolution of care funding since the creation of the NHS in 1948. While continuing to deliver on national care standards and the patient rights set out in the NHS constitution, Greater Manchester now has a unique opportunity for innovation and improvement in health and wellbeing. The eyes of the country will now be on what this new partnership can deliver, and today the work begins.”