The NHS must be decentralised and freed from government control if it is to thrive, according to think tank Demos.

Its report says top graduates are spurning public service because of a “vicious circle” of falling status and low morale compounded by a “crippling” lack of trust.

And it says that if staff were given more autonomy - “because they know their job better than anyone” - significant improvements to the NHS, teaching and social services would follow.

To achieve that, it says, bureaucracy must be cut, tiers of management removed and quangos such as the Audit Commission abolished.

Report author Max Wind-Cowie said: “Failure in public service stems from a failure to trust that experienced teams and individuals know best. We will get better services if we put trust back in the professionals.

“All the talk at the moment is about protecting frontline staff from cuts, but that alone won’t make the difference if we continue to treat them like untrustworthy teenagers.

“Every government has the tendency to centralise. Whoever wins the next election must do everything they can to resist that urge and let go.”