The government's reform of the NHS remains 'embryonic' and in some cases is in 'full retreat', the think tank Reform has claimed.

In a report published this week, the right-leaning think tank says the NHS must become more productive to address what it describes as a "cradle to grave gap" in performance compared with health systems in other countries.

NHS Reform: national mantra, not local reality sets out two scenarios for the future of the health service. A negative scenario - described as "managing NHS decline" outlines a service that delivers "substandard quality and access" for 11-12 per cent of GDP.

The positive scenario "NHS opportunity" delivers excellent quality of services at a cost of 9-10 per cent of GDP.

The report also calls on the government to outline an economic constitution that requires the NHS to increase value for money. It says junior health minister Lord Darzi's forthcoming NHS review should guarantee patient choice and a diversity of providers.

Imperial College London professor of health policy and report author Nick Bosanquet said: "The Department of Health's strategic challenge is to transform the quality of NHS care within a foreseeable future of tightly limited resources.

"The NHS does not need a 'charter' which amounts to a statement of good intentions. It needs an economic constitution which gives every level of the service the duty to achieve value for money."

The report says that the department's claims of reform are a "national mantra rather than local reality" and it criticises primary care trusts, practice-based commissioning and patient choice, which it says have failed to drive significant change in the interests of patients.

It also says that health service managers have been prevented from focusing on challenges for the NHS in the medium term because of the "short-term horizon of much departmental policy".

NHS Confederation policy director Nigel Edwards said the creation of an economic constitution was an "interesting idea" but called on Reform to draw up a route map on how to implement its proposed changes to the NHS. "The report suffers from the expectation of instant gratification, which they are not going to get immediately," he said.

"There is some confusion about the how in terms of how these ideas will be delivered and it is overly focused on economics as a model."

Shadow health secretary Andrew Lansley said the report highlighted Gordon Brown's mismanagement of the NHS.

"He has spent a lot but achieved too little," he said.

The report is also critical of the NHS emphasis on delivering financial surplus, which it says is due only to a "temporary combination of the last years of major funding increases and a pause in centrally prescribed cost increases".