NHS England will be abolished and brought under “democratic control” in an attempt to cut bureaucracy and duplication, Sir Keir Starmer has announced.

The prime minister said the move would free up money for front-line services.

The government said it expected around 50% of the jobs at NHS England, which as of December had 14,400 staff, and the Department of Health, which has 3,500 staff, to go.

In a speech in Hull, Sir Keir said for too long politicians had “chosen to hide behind vast arrays of quangos” – organisations funded by taxpayers but not directly controlled by the government.

The government said work would begin immediately to return many of NHS England’s current functions to the Department of Health and Social Care, with the aim of completing the process in two years.

The bold move gives the government more control and accountability over one of their key pledges – to cut NHS waiting times.

NHS England – which the government dubbed “the world’s largest quango” – oversees the health service, working with government to agree funding and priorities, as well as monitoring the performance of local NHS services.

It was given autonomy by the then-Conservative Health Secretary Andrew Lansley in 2012, with the aim of freeing the organisation from interference by politicians.

Announcing the decision, Sir Keir said: “I can’t in all honesty explain to the British people why they should spend their money on two layers of bureaucracy.

“That money could and should be spent on nurses, doctors, operations, GP appointments.”

The Conservatives said they supported “measures to streamline NHS management and the principle of taking direct control”, and shadow senior minister Alex Burghart added: “Labour ministers now have nowhere to hide or anyone else to blame on NHS performance.”

Liberal Democrat health and social care spokeswoman Helen Morgan also welcomed the move but added: “You cannot fix the NHS without fixing social care, no matter how much unnecessary bureaucracy is slashed.”

Hugh Alderwick, director of policy at the Health Foundation think tank, said there was some logic in the decision as it could help provide clarity on priorities.

But he warned it would also come with disruption and divert the focus of senior leaders.

However, Sharon Graham, head of the Unite union, said: “Taking an axe to these jobs is an ill-thought-out strategy that could end up meaning frontline healthcare staff struggle to do their jobs effectively if they aren’t paid on time, don’t have basic medical supplies or are forced to do additional administrative work rather than treat patients.”

Sir James Mackey, who will be taking over as transition chief executive of NHS England, said while the news would be “unsettling” for staff it would help “deliver the biggest bang for our buck for patients”.

The news comes after senior NHS England figures including chief executive Amanda Pritchard and medical director Sir Stephen Powis announced they were stepping down.

The announcement came as part of a wider speech on reforming the state, which Sir Keir described as “overstretched” and “unfocused”.

“Over a number of years politicians have chosen to hide behind vast arrays of quangos, arm’s length bodies, regulators, reviews,” the prime minister said.

“A sort of cottage industry of checkers and blockers using taxpayer money to stop the government delivering on taxpayer priorities.”

The number of quangos has fallen by more than half since 2010 but there are still more than 300 across the UK.

They include regulators, cultural institutions and advisory bodies, ranging from large organisations like NHS England, to smaller ones like the Gambling Commission and the British Film Institute.

And the new Labour government has set up more than 20 new quangos since winning power.

These include Great British Energy, which will invest in renewable energy to help meet the government’s clean power goals, and Skills England, which aims to support people to find jobs.

The government has also suggested it wants to cut the size of the Civil Service, which has a headcount of more than 500,000.

Civil servants are politically impartial officials employed by the government, covering areas including policy development and services like benefits and prisons.

In his speech, Sir Keir linked the need to reshape government to global instability which has pushed up bills at home, saying the state needs to be operating at “maximum strength”.

He promised to cut the costs of regulation for businesses by 25% to boost economic growth.

His plan also includes greater use of artificial intelligence, underpinned by the mantra that civil servants should not be spending time on tasks where digital or AI can do it better and quicker.

Earlier this year, Sir Keir faced a backlash saying “too many people in Whitehall are comfortable in the tepid bath of managed decline”.

In his speech he was keen to stress his criticism of the state was not aimed at individuals.

“This is not about questioning the dedication or the effort of civil servants,” he said. “It’s about the system that we’ve got in place.”

Mike Clancy, general secretary of the Prospect trade union, which represents civil servants, said he agreed reform was needed and pay frameworks needed to ensure the Civil Service could recruit and retain talent in areas like science and digital.

“But the government must recognise that there is a fine line between cutting back bureaucracy and undermining the essential functions of the state,” he said.

“Civil servants in agencies such as HSE [Health and Safety Executive] and the Environment Agency are at the frontline of delivering on the government’s missions – writing them off as ‘blockers’ is a profound mistake.”