Former Labour health secretary Alan Milburn has warned his successors in the party to back competition in the health service and adopt a more reformist outlook.

Mr Milburn said of competition: “If the Labour party doesn’t change its position it will bitterly regret it.”

He was speaking this afternoon at a meeting of the think tank Reform, just one day after the Independent on Sunday printed a piece by shadow health secretary Andy Burnham accusing David Cameron of privatising the NHS after promising the opposite when it was in Opposition.

Mr Milburn, who served as health secretary from 1999 to 2003, said: “Labour wins when it’s a party of reform. Labour loses when it’s a party of conservatism.

“It needs to be a party of reform – the space is there [for it to do so].”

He said “competition is an important driver alongside a host of other drivers” for ensuring a successful NHS. He said that when it was “properly regulated”, competition could deliver good results for patients.

However, Mr Milburn acknowledged there were limits, saying: “That’s not to say you would want to see competition for ambulance services.

“There’s no doubt in my view that in the future the care system will need more, not less, competition overall.”

Mr Milburn also criticised the stance of the government, accusing health secretary Andrew Lansley of having merely “flirted with the idea of competition”.

He also called for “massive experimentation” around the country in terms of devising new models for commissioning, which would enable “some local authorities to pursue the health commissioning function”.

“In time I suspect there will be a move towards local authorities becoming mainstream players in the health patch, not just the public health patch,” Mr Milburn said.

Mr Milburn also confirmed that he had been offered the job of chair of the NHS Commissioning Board.

Asked why he chose not to take it, he said: “Have I got three letters tattooed to my forehead: MUG?”

Speaking to HSJ afterwards, Reform deputy director Nick Seddon compared what he believed to be Labour’s anti-competition agenda with Mr Lansley’s comments in Opposition that as health secretary he would not close down hospitals, when hospital closures were require to improve NHS services.

Mr Seddon said that when in power the realities of improving services meant parties had to change policy and “you get accused of hypocrisy or having no principles”.

“The same applies to Labour and competition,” he said.