A new report has poured scorn on the government’s emphasis on National Health Service (NHS) cost and efficiency savings, saying this is its “make or break” year.

The right wing think tank, Reform has today published research it said has found the long term prospects of the NHS are weaker than they were two years ago because of failures to curb costs and push through modernisation plans.

Professor of health policy at Imperial College London, Nick Bosanquet warned the expense of projects like the £6 billion National Programme for NHS IT put too much emphasis on “vague and hypothetical” efficiency savings, despite huge financial deficits and pressure to cut costs.

Instead he suggested the government would do better to write off the total NHS debt of £500 million accumulated last year, as well as focus on the effects of long-term construction projects and staffing shortages and costs.

The report also said the implementation of key IT-related modernisation milestones like practice-based commissioning, payment by results and patient choice must accelerate in 2007 to avoid wasting the billions already spent.

The Department of Health responded to the report, dismissing the call for a deficit write-off as unfair to those NHS trusts not affected by financial debt. It said reforms to patient waiting times or example, were already having an affect and restated the government’s stated expectation that the service will be in overall financial balance by the end of this year.