Ahead of next week's Spending Review, a leading think tank has urged Ministers to lift the ring-fence on the health budget in order to accelerate progress on NHS reform, which it says is currently "flatlining."

One of the consequences of reducing public spending in this Parliament has been innovation and change in the public services affected, but much-needed modernisation of the NHS is being delayed because, unlike the other public services, there are few reasons to innovate. This is because its funding has been guaranteed during this Parliament, says the report, which is produced by Reform.

"Ministers should be extremely concerned about the lack of progress" achieved in NHS modernisation so far, says the study, and it points out that: "in several areas, reform is actually in retreat."

Unlike most public services, Ministers have both ring-fenced the health budget and sought a radical agenda of reform and value for money, the report notes. The government has said it wants an NHS with a smaller and more flexible workforce, with greater innovation in how care is delivered, more competition, better cooperation between the NHS and social care, more financial discipline and reduced bureaucracy.

However, a progress report compiled by Reform on the government's reform objectives and the key changes which have been made since 2010 show limited improvements and a worsening situation in some areas.

For example, it notes that, while the government is seeking a shift in care from hospitals to other settings, since 2010 general and acute hospitals have received a higher share of the NHS budget. Other developments include:

Objective: reduction in hospital beds. Key change since 2010: beds reduced by 4%, compared to a peak fall of 7.7% in the last decade;

Objective: smaller workforce. Key change: workforce reduced by only 2%;

Objective: failure regime. Key change: not secure;

Objective: innovation in how care is delivered. Key change: rising use of alternatives to A&E stalled;

Objective: competition, including private-sector delivery. Key change: growth in non-NHS providers stalled;

Objective: cooperation between NHS and social care: Key change: days lost to delayed transfer increased;

Objective: reduced bureaucracy. Key change: many new NHS organisations created; and

Objective: more flexible workforce. Key change: new flexibility rejected in 2012.

Reform notes that the consequences of this lack of reform include a continued increase in visits to A&E departments and emergency admissions, rising A&E waiting times and an increase in hospital occupancy rates.

Health Secretary Jeremy Hunt has argued that the NHS budget should not be cut since demand for health services is rising. This ignores the fact, however, that NHS spending increased 94% in real terms between 1999-2000 and2009-2010, says the report, adding: “removing the ring-fence on the health budget would provide a reason for the NHS to seek the efficiency and change that Ministers rightly want but which they have yet to deliver."