Two heavyweights of Labour’s health policy have teamed up with a think tank close to the Conservatives to argue for a curtailing of the Department of Health’s power and remit.

Writing for the think tank Policy Exchange, Bill Moyes, former executive chair of the foundation trust regulator Monitor, and Tony Blair’s former health adviser Paul Corrigan urge the government to set up an independent organisation to determine NHS tariff prices, which could not be “manipulated” by strategic health authorities or the DH itself.

The tariff should be made to stick, and not be subject to local manipulation by SHAs

Their position follows the NHS operating framework for 2010-11, which gives SHAs power to “temporarily suspend” contractual arrangements between commissioners and providers. Mr Moyes and Mr Corrigan say this adds up to the national tariff “progressively being abandoned”.

They criticise the tariff arrangements for next financial year, saying they effectively mean SHAs can choose to prop up inefficient providers or commissioners by picking which elements of tariff “discipline” they apply to them.

They say: “The tariff should be made to stick, and not be subject to local manipulation by SHAs.”

The Policy Exchange paper Future Foundations - published today - is Mr Moyes’ first since he left Monitor in January.

In arguing for an independent organisation “devoted solely to structuring a tariff within a defined envelope of public expenditure”, Mr Moyes indicates a policy preference different from the one he espoused as executive chair of Monitor. There, he argued Monitor should eventually evolve into the single economic regulator for NHS providers - overseeing financial risk, competition and tariff setting.

The two authors also argue that tariff prices should be redrawn to reflect the most efficient price of a given patient pathway, rather than the average price of a given single procedure, as at present.