A business leader has accused the government of “losing momentum” over its public sector reforms, which he said had been “derailed”.

Neil Bentley, deputy director general of the CBI, said the coalition had given the impression of “having lost its way”, saying ministers were uneasy about how to present reforms.

Speaking at the CBI’s South East annual dinner in Epsom, Surrey, he questioned the government’s commitment to reform and warned that failure to embrace competition could lead to deficit reduction plans faltering.

“In most areas, we’re seeing public services cling on to existing ways of doing things, with vested interests fighting modernisation at every turn and campaigning against change.

“Just this week, we’ve seen the forces of inertia in the NHS unions triumph on health reform. This is a missed opportunity for the government, and with profound consequences.

“Patient services will only be improved if the NHS is opened up to far greater competition and dependence on hospital care is reduced. Without reform, the £20bn savings needed to help balance the NHS books will surely hit services.

“Health’s not alone. In local government, policing, probation and elsewhere, reforms are losing momentum. The coalition gives the impression of having lost its way, uneasy about reforms and unsure how to present them.”

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