An agency that has received nearly £70m to support London’s commissioners is being shut down after just two years in existence.

The capital’s 31 primary care trusts have approved a plan to shut Commissioning Support for London, which launched in 2009, at the end of March. Around 60 of the agency’s 150 staff are expected to face compulsory redundancy.

The decision to close CSL comes two months after NHS London awarded a contract to provide commissioning development for GPs to a partnership led by management consultant KPMG.

An NHS London spokesman said: “To cut management costs, PCTs in London have agreed to close CSL. Some of its functions that have benefited patients over the past two years will continue.”

He said a new, smaller, organisation will be created to support commissioning in London and continue with clinical reviews of services, such as mental health and cancer. It will also house a “central source of health intelligence and data analysis”.

The spokesman added: “A number of staff employed by CSL will be transferred to the new organisation or re-deployed throughout London’s NHS to make sure that their commissioning expertise and experience is not lost.”

Some of the services provided by CSL, such as commissioning development and IT tools for claims and contracts management, will not be provided by the new organisation.

The London Health Observatory, which is hosted by CSL, is expected to be taken over by the new national public health agency, Public Health England.

Uncertainty persists about the market for commissioning support, with the planned abolition of PCTs and handover of commissioning to GP consortia.

Last year CSL was planning to reposition itself as a provider of support to consortia, acknowledging it would face competition from the private sector and, potentially, other organisations created by former PCT staff.