NHS chief executive Sir David Nicholson has said admitted he has taken greater central control of the NHS budget, despite moves towards localism under the government’s health reforms.

Speaking at the Local Government Association conference in Birmingham, Sir David said that in previous restructures the NHS had “lost control of the money”.

He said: “Whilst much talk has been about localism, at present I have more control nationally over the money than I have ever had, and I don’t apologise for that. We don’t want to lose control of the money.”

Sir David also said that, for several years, the NHS had “raided the public health budget to bail out other parts of the system” and was “paying the price for that”.

The admission is likely to be controversial because councils’ initial budgets for public health services when they take responsibility for this in April 2013 will based on historic NHS spending.

In his speech Sir David also stressed the importance of “joined-up, integrated services” and said health and wellbeing boards would “shift the centre of gravity to local government”.

“In a lot of services on the cusp of health and social care, we have failed patients in the past and there is a strong case for bringing in innovation from the wider sector,” he said.

Sir David said, however, that there were reasons to be optimistic about the health reforms.” I can’t remember a time when there have been more conversations between health and local government,” he said.

He said representatives of clinical commissioning groups had told him it was “extraordinary” to “be allowed into local government land” and that they enjoyed working with politicians.

He said he was working on a compact agreement with the LGA that would “represent a commitment from us all to make this new devolved system actually work in practice”.

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