In its report published today, the Labour-dominated health select committee calls for a review of the use of private hospitals by the NHS.

It comes as the Office for National Statistics publishes a report showing a sharp reduction in public services as investment increased.

In the NHS, efficiency fell between 1995 and 2000 as spending increased by £10 billion, prompting questions as to whether new investment announced in the budget will produce the improvements.

However, policing and education efficiencies were found to remain fairly static.

"Everyone agrees that we need to spend more on the NHS, but we also need to get the best results from what we spend," said shadow chancellor Michael Howard.

"Worryingly, the ONS make it clear that the extra money spent on healthcare has not been matched by the sort of improvements in outcomes that we would have all wanted to see."

Health secretary, Alan Milburn, is today expected to announce the establishment of an NHS Investment Bank to control future spending by hospitals, with a start-up fund of £100 million.