Simon Stevens believes the NHS Trust Development Authority and Monitor should be merged.
The NHS England chief executive also warned politicians that taking out management costs will not be an effective way of making the NHS more efficient.
Mr Stevens agreed that the two should merge. He said: “Increasingly the provider oversight role, as between those two organisations, is founded on a distinction without a difference,” although they have “distinctive capabilities”.
He said that the level of regulatory intervention in a provider should be based on the level of difficulty a trust or foundation trust faces.
More from the Simon Stevens interview
“The thought that David [Bennett] was expressing was that you’ve got a spectrum of performance in the foundation trust sector, just as you’ve got a spectrum of performance now in the trust sector.
“So quite obviously some intrusive approach to second guessing provider level decisions would be a mistake across the board. On the other hand we know that if you look at the performance misses that have occurred over the winter period, about a fifth of trusts account for about a half of the performance pressures in the NHS, and in some cases one or two organisations are accounting for over 90 per cent of the 12 hour trolley waits in A&E.
“So we do need an approach that can differentiate both within the foundation trust sector and within the trust sector.”
Overall, however, Mr Stevens argued that there would be few financial savings for the next government to find through management cost cuts.
He said NHS England has taken out 30 per cent of its costs over the past two years, and argued that the NHS is “without doubt the leanest of any health service in western Europe”.
He said: “Our admin costs are under 3 per cent, compared with 5.2 per cent and 5.8 per cent in France and Germany.”
Labour’s 10 year plan for the NHS last month pledged to cut “bureaucracy” and duplication caused by the Health Act 2012, and the range of new organisations – including NHS England and the TDA – it established.
Mr Stevens said: “The question is more about what does a pound of investment in change capability buy you relative to a pound of another use of the same resources?
“I think we know that one of the big questions we’ve got to answer over this next five year period is our change capability.”
Mr Stevens acknowledged that there would be some savings to be made from “non-value added administrative cost”.
“But is that going to be the principal route to efficiency and putting us on a sustainable path? No, we’ve got to be much more fundamental in our approach than that,” he added.
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NHS England chief backs Monitor-TDA merger