In a first for England, Greater Manchester is to be handed control of its £6 billion NHS budget, with its ten councils taking responsibility for the region’s entire health and social care system.

The move was revealed by the Manchester Evening News which has seen an internal document. The newspaper refers to a draft memorandum of understanding that includes the creation of a board to distribute funding and take decisions covering personnel, regulation, information-sharing and NHS buildings.

Chancellor George Osborne is expected to visit Manchester on Friday to unveil the scheme which would transfer the spending of NHS cash to the councils from April 2016. The move would fit with the government’s strategy of extending devolved powers to the city, giving the councils control over all its £25 billion public spending budget (including transport and housing) after town hall leaders agreed to have an elected mayor from 2017.

Richard Humphries, assistant director of The King’s Fund told BBC Radio 4’s Today programme that “depending on the detail – and the detail is really crucial and we don’t have that yet – you could either see this as a triumph for local democracy or creating real risks of yet another reorganisation of the NHS when it’s barely recovered from the last one”.

He added that “if the plan is to give the money to local government, the words ‘chalice’ and ‘poisoned’ perhaps spring to mind”.

In hands of a mayor that Mancunians don't want

The plans have not gone down well with the National Health Action Party. Co-leader Clive Peedell said it means health-spending decisions "will be concentrated in the hands of a mayor that the people of Manchester didn't even want and other locally elected politicians and therefore subject to local political pressures".

Running a multi-billion pound health budget "is a massive task which will inevitably end up being outsourced like much of local authority provision", he added. Social care is "already mostly privatised and merging with health care at a local level will likely result in further privatisation, means-testing and charging, with more NHS money diverted to private companies".

Dr Peedell concluded by saying that "this is yet another depressing milestone in the denationalisation and break-up of the NHS".