The Department of Health has confirmed it is still negotiating its core contract with NHS Employers, a week into the new financial year.

It follows tensions over NHS Employers’ membership model, which was scrapped after failing to secure firm support from either the DH or trusts.

HSJ understands foundation trusts are concerned the close relationship between the DH and NHS Employers does not reflect their desire for greater freedom over pay and contracts

The DH wants reassurances about Employers’ governance arrangements before it will sign the contract, which accounts for the vast majority of Employers’ income and more than half that of its parent organisation, the NHS Confederation.

Interviews for a new Confed chair are taking place next Tuesday, and a new board was put in place at the end of January.

A review into governance arrangements is also being carried out by auditors PKF.

But HSJ understands foundation trusts are concerned the close relationship between the DH and NHS Employers does not reflect their desire for greater freedom over pay and contracts.

NHS Employers said this week it did not want to “prejudge the outcome of [PKF’s] independent review”.

A DH spokesman said it hopes to conclude the negotiations shortly.