'We can only deliver genuine transformation of health care services if our staff understand what we are trying to do'

The NHS is just over half way through a major programme of investment and reform. The first stage of this journey was about expanding capacity and increasing investment to support national targets to improve patient access and care.

The second stage of this ten-year journey saw the introduction of some radical reforms to put incentives such as choice and payment by results in the system to drive a more responsive health service. We are now at the cross over point between the second and third stage of reform, which is about delivering transformation. Increasingly, our emphasis is on putting more and more power into the hands of patients and staff, to use the increased investment and reforms to deliver a real transformation in the quality of health and health care.

This shift in emphasis requires a different kind of leadership. We need a different skill set at national level, to support local NHS staff in the task of delivering this transformation on the ground. This was why, last year, the role of chief executive of the NHS was separated from the permanent secretary of the Department of Health.

In order to take this forward, the permanent secretary, Hugh Taylor, the chief medical officer, Sir Liam Donaldson and I have agreed with the secretary of state that we will create a distinct NHS Leadership Team within the DoH. The team will consist of the director generals in the DoH who work most closely with the NHS, and will support me in achieving the outcomes I was appointed to deliver. In addition, I am creating three important new posts.

To take forward the challenge of service transformation I will appoint a director general for commissioning and systems management. This will develop world-class commissioning in the NHS, to deliver better health and care for patients and better value for citizens. A key feature of the role will be to manage the environment in which providers and commissioners operate. It will also develop policy for new provider organisations, which the SHAs will implement. This post should not be interpreted as a move away from the purchaser/provider split, but as a recognition of the distinctive role that the department plays in having oversight of the system as a whole, and will ensure that the full benefits of commissioning and provision are realised in the interests of all patients.

I am pleased that this year overall the NHS has balanced its books. However, to prepare for the next spending review, we need to continue to bear down on deficits and secure further efficiency and productivity gains. A new director general of finance and performance will strengthen the operational grip on finance and performance in the NHS.

We can only deliver genuine transformation of health care services if our staff understand what we are trying to do, and are actively engaged in making changes that will benefit patients. A new medical director for the NHS will champion clinical engagement throughout the service, and lead the work of the national clinical directors, or tsars. The medical director will also be charged with improving safety and quality in the NHS. In this role he will have the help and support of the chief medical officer who will also focus on public health and protection as the Government's senior medical advisor.

These changes will put the management of the NHS within the DoH on a much stronger footing, supporting the NHS locally to provide clinical leadership, build effective commissioning and ensure best value for tax payers money. They are not a precursor to off-shoring the NHS functions of the department, but are essential managerial changes to ensure that we do not lose focus or momentum at this important part of the reform journey.

David Nicholson is chief executive of the NHS.