The NHS chief executive's advice to any incoming health secretary is to steer clear of further structural upheaval and allow managers to drive reform locally.
In an exclusive interview with HSJ, David Nicholson said his advice to a new minister would be to 'focus on a framework where the organisation drives change'.
'We need to have a settlement between politicians and the NHS where they set the framework and the NHS delivers,' he said.
'What I would say to anyone coming into that role is that we have been through a difficult patch, and we are now seeing the green shoots.'
He was adamant that the£510m surplus the NHS generated last year would stimulate improvements: 'The surplus is out in the system, so [local managers] have control over it. They are expected to make the decisions themselves.'
Mr Nicholson hoped these funds would ease the impact of this October's tight comprehensive spending review, which otherwise 'could be a cliff edge'.
His comments came ahead of a widely expected cabinet reshuffle by incoming prime minister Gordon Brown and after a government review of the Department of Health slated its leadership and strategy formation.
The Cabinet Office's capability review, published last Friday, revealed the DoH 'has not yet set out a clearly articulated vision for the future of health and social care'.
'Consequently, staff and stakeholders are unclear about the vision for health and social care and feel little sense of ownership of it.'
The review said the 2,300 DoH staff are poorly led, suffer low morale and operate in silos: 'Staff are generally committed to improving health outcomes, but corporate behaviours are weak and there is a limited sense of working together.'
The DoH's score for strategy was worse than the Home Office achieved last year, with the categories 'base choices on evidence' and 'focus on outcomes' both identified as an 'urgent development area'.
The team found poor integration between policies.
The review said: 'Many stakeholders in the NHS and beyond feel the DoH generates too many initiatives without properly considering the interactions or offering clarity on prioritisation. There is little. evidence that the DoH has a systematic process for learning from past experience.'
The review team found ample evidence of strained relations between the DoH and the rest of the health sector, with widespread complaints that it does not listen.
Responding to the report's criticisms, Mr Nicholson said: 'We are trying to work through the consequences of the decision to split the job [of permanent secretary and NHS chief executive].'
DoH permanent secretary Hugh Taylor said in his response to the review that the DoH was coming 'out of a difficult period'.
'The scale of the challenge remains high to articulate a clear vision for health and social care, to engage with staff and stakeholders, to provide stronger corporate leadership across the DoH and to continue to build capability,' he said.
NHS Confederation policy director Nigel Edwards said any new health secretary should 'improve relationships with staff and the NHS to create a common purpose'.
While the new top management team at the DoH was 'making a difference and getting to grips with long-standing, systemic problems' more effort had to be made to empower local managers, he said.
'They need to create an environment locally where people are held to account but where there is also autonomy.'
Other health experts said the health secretary under Mr Brown should guide the DoH towards focusing on outcomes, reform and devolution.
York University health policy group director Professor Alan Maynard said: 'I think more focus should be given to measuring patient outcomes. The system is too obsessed with structural reform and the amount of money which goes into the NHS.'
Former health adviser to Tony Blair Professor Julian Le Grand said: 'They have got to get commissioning right. We have an agenda of cost escalations, we have powerful foundation trusts and a growing private sector, all of whom are hungry for business, and they will be sucking in demand unless we have a good system for managing demand.'
- Harriet Harman, Labour spokeswoman for health from 1987-92, was elected deputy leader at the weekend. The parliamentary record shows she voted for foundation hospitals and the ban on smoking in public places.