Health quangos and primary care trusts should be abolished, according to Liberal Democrat health spokesman Norman Lamb’s personal proposals.

His The NHS: a liberal blueprint, published by think tank CentreForum, suggests replacing PCTs with elected local health boards with the power to raise cash and source healthcare from NHS, private or voluntary providers.

It says giving local boards financial and political responsibility would cut central bureaucracy and encourage them to improve efficiency, enforced by a corresponding “payments by results” system.

This would mean hospitals would not be paid anything if a patient were given the wrong medication, suffered deep-vein thrombosis or contracted a hospital infection during their stay.

Other proposals include fining or banning people from local pubs if they drunkenly abuse accident and emergency staff, and making health boards pay for private treatment if they keep patients waiting too long.

Quangos such as the National Patient Safety Agency, Independent Reconfiguration Panel, National Treatment Agency and Connecting for Health would be scrapped under the blueprint, as would strategic health authorities.

Further savings could be made by scaling back the NHS IT programme and reviewing top quango management salaries. Mr Lamb said chairs and chief executives earned more than £5m in total last year, while 19 out of 23 top executives were paid six-figure sums.