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Treasury ministers are "flying blind" in attempting up to 40 per cent cuts in public spending, a think-tank has warned.
The Centre for Social Justice (CSJ) said the government is taking a "blunderbuss" approach to the spending review, which needs "drastic changes" if it is to deliver genuine value for money.
The think-tank founded by the work and pensions secretary, Iain Duncan Smith, said the review of state spending risks producing cuts based on political calculation and administrative ease rather than genuine value for money.
In a report submitted to chancellor George Osborne, it says departments might be tempted to "salami slice" each existing project's budget, instead of axing measures which do not work and supporting those which deliver social value.
CSJ executive director Gavin Poole said "ministers are effectively flying blind, under orders to cut programmes by up to 40 per cent but with confused guidance about their departments' objectives and how they should choose between spending options.
"The danger of this blunderbuss approach is that effective programmes, making a real contribution to the country’s well-being will be axed, while other wasteful or pointless spending will survive."
The report recommended that the Treasury look to the approach of the US administration, which set up the independent Washington State Institute for Public Policy to assess the cost-effectiveness of social spending.
Shadow work and pensions secretary Yvette Cooper said: "Even the right-wing thinktanks have recognised that an obsession with short-term headline cuts could do lasting damage and cost us all more in the long run."
A spokesperson for the Treasury said the spending review represented a re-evaluation of the government's role in providing public services.
"It will ensure the UK lives within its means, but also that spending is focused on protecting the quality of key frontline services and supporting the worst off in society."
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