Too many targets have overwhelmed NHS and made it the 'sick man of Europe'

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This is the reason that drugs and treatment are still being rationed despite huge increases in Health Service spending, Civitas found.

It said in a report that the growth of postcode lotteries and the "woefully inadequate" state of out-of-hours care are being aggravated by the centralised system.

The NHS is falling further behind other European countries when it should be learning from them, according to report author James Gubb.

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The NHS is falling behind other European countries

He said: "The NHS's problems are systemic. The source of its problems is certainly not the world-class doctors, consultants, nurses and even managers who work in the service - rather the perverse incentives created by the system they work in.

"The deluge of central direction the NHS is subject to in its day-today working actually exacerbates inequality."

The report by the Right of Centre think-tank, called Why the NHS is the Sick Man of Europe, found that other European countries achieve better results with their social insurance schemes.

In these, patients who can afford to pay for their health care do so, while those on low incomes have their treatment subsidised by the Government.

Mr Gubb said: "The latest drugs and treatments are much more widely available and just as, if not more, universal.

"Compared with many of our European neighbours, the NHS is providing an inferior service to those who need it the most."

Two years ago, Holland was facing similar problems to Britain, which it tackled by cutting state control of its health service's purse strings.

Mr Gubb said: "Now the Dutch healthcare system is being hailed as possibly the most streamlined, equitable and competitive system in the world. It is time for the NHS to follow."

Labour's spending on the NHS has doubled to £100billion since 2000. The service is heading for an "embarrassing" £1.8billion surplus this year.