Health minister Mike O’Brien has called on strategic health authorities to “justify their existence”, saying more of their budgets should be devolved to commissioners.

Speaking to HSJ after a Labour Party conference fringe event, he said SHA chairs and chief executives were paid large salaries but the organisations’ performances were highly variable across the country.

What we don’t want to see is a slash and burn agenda. It’s entirely unnecessary and we’ll be very critical if we see it happening

He said: “They get a lot of NHS money and have to justify their salaries. They must…show they’re key components of delivering on quality and innovation.”

This could partly be achieved using funds provided by the Department of Health for promoting innovation in their regions, he said.

SHAs are each receiving £2m this financial year and £5m in each of the next four years to encourage staff to develop new ideas.

Mr O’Brien said: “They’ve got to justify their existence, [show] that they’re actually delivering, not just encouraging, innovation, by showing how they’re spreading it through the NHS.

“They have a huge amount of money, some could be delegated effectively to primary care trusts.”

He would not say how much SHA money he thought would be better held by PCTs but said the issue needed to be carefully examined.

He also ruled out abolishing SHAs, which was proposed at the same event by former health secretary Alan Milburn and has been hinted at by the Conservative Party.

SHAs play an important co-ordinating role within regions, he said.

He said his views have been partly informed by the scandal at Mid Staffordshire Foundation Trust, where hundreds of patients are thought to have died unnecessarily due to poor care.

In March, after the Healthcare Commission issued a damning report about the trust, former NHS West Midlands chief executive Cynthia Bower told HSJ the problems had not been on the SHA’s “radar”.

Mr O’Brien also used the fringe event to warn managers not to make drastic spending cuts despite the need for the NHS to save £15-20bn.

Echoing comments by chief nursing officer Dame Christine Beasley last week, he said: “What we don’t want to see is a slash and burn agenda. It’s entirely unnecessary and we’ll be very critical if we see it happening.”

Savings could be made while improving the quality of services, he said, for example using automatic drug dispensing.