Health bosses have warned of closed hospitals, treatment rationing and lower standards of patient care as a result of the government’s controversial reforms of the NHS.

A report from the NHS Confederation - which represents the bulk of health service organisations - describes the proposed transfer of commissioning power to GPs as “extraordinarily risky”.

The report accepts the need for reform, but criticises health secretary Andrew Lansley for failing to persuade patients or health professionals that his radical proposals will improve the NHS.

Under plans to be set out in a Health and Social Care Bill expected on Wednesday, primary care trusts will be abolished in England and their responsibility for commissioning £80bn worth of treatment and services - around 80% of the NHS budget - will be handed over to commissioning consortia.

The NHS Confederation report raises concern over the new system under which consortia of GPs will be able to send patients to whichever provider they judge will offer the best treatment, warning that this will force the NHS to shrink in order to make space for new healthcare providers.

The policy of “price competition” - allowing hospitals to undercut one another to attract patients - poses a risk to standards of care, the report says.

And it adds: “The absence of any compelling story about why the reforms are necessary or how they will translate into improved outcomes is of concern.”

It is “extraordinarily risky” to undertake such a fundamental restructuring at a time when the NHS is being asked to save £20bn by 2014-15 and is undergoing 45% cuts to managers.

A Department of Health spokesman said: “We have listened extensively to all views about our plans to modernise the NHS. And now, with thanks to some 6,000 responses, we have set out with clarity and with direction why and how we need to deliver long-lasting reform in the NHS.

“The government has protected the NHS budget, but it must still simplify its structure and cut bureaucracy, which will release further savings to invest in care for patients. Modernisation of the NHS is a necessity, not an option. What we are proposing is a carefully staged transition, with the ever increasing engagement of patients and NHS staff.

“We are encouraged by activity taking place at a grass-roots level, with 52 GP pathfinder groups already in place and many more soon to follow. We have been clear that the pathfinder programme is about testing the principles of our proposals for GP consortia. Having pathfinders commissioning at this level will provide valuable learning about the benefits and risks that such an approach can bring.

“The NHS must play its part in creating an NHS that puts patients at the heart of everything it does, focuses relentlessly on improving healthcare outcomes and liberates professionals at every level to take decisions in the best interests of patients, rather than being micromanaged by politicians and civil servants.

“The Health and Social Care Bill, to be published this week, will provide a clear legislative framework to support that ambition, with increased autonomy and accountability at every level in the NHS.”