IF Gordon Brown chooses to maintain the course set by Tony Blair, he will, according to the think tank Reform, preside over “slower growth and deeper social division”.

What should Brown do to prevent this? The Sunday Times and Reform, whose report Key Policy Lessons of the Blair Years will be published this week, suggest:

Decentralise the NHS: Brown has talked about an independent board for the health service. That implies central direction. Primary care trusts should be given responsibility for securing the best care for patients regardless of provider. This has proved itself in Scandinavia.

Allow real choice in schools: Brown has signed up to the city academies but remains wary of choice. School funding should follow the pupil. Independent schools that can compete with the public sector on price should be encouraged to do so.

Increase prison capacity: Overcrowding and early release risk causing more crime. The average criminal commits 140 crimes a year. Longer sentences for burglary have cut their number.

Cut business tax: Even after the cuts announced in March, the UK’s main rate of corporation tax will be 28%, compared with a European Union average of 25.8%. There is strong evidence that cutting corporation tax would pay for itself many times over in jobs and growth.

Return to prudence: Although some standards in the National Health Service and education are improving, there is little evidence that the tens of billions of pounds poured in have been value for money. Reform’s analysis suggests overstaffing in the public sector is endemic, with the NHS probably 25% overstaffed. The current comprehensive spending review, due to be finalised in the autumn, should be used to force through genuine change. Public spending could and should be lower as a share of the economy.

Give the young tax breaks: The “iPod” generation – insecure, pressured, overtaxed and debt-ridden – is frozen out of the housing market and facing the prospect of higher taxes and pension contributions. By 2012 the average graduate will face an effective tax burden of 47.2%. Brown should reduce taxes for low earners and cut stamp duty on house purchases, especially for first-time buyers.

Rethink capital projects: The present government commitment to building schools and hospitals is open-ended and the school programme will cost at least £45 billion over the next 15 years. It threatens to create plenty of white elephants. Brown should review the programme to allow other, possibly more efficient, providers to compete.

Deliver welfare reform: International schemes show that a less centralised welfare system – which makes greater use of both private and voluntary sector providers – would be more effective in helping people back into work. This would also help the government to meet its child poverty targets for 2010-11 and 2020 – which it is currently set to miss by a significant margin.

Find a new political language: Ministers still define success by extra spending, manpower and targets. Instead, ministers should make the case for change without looking to government alone to deliver. Much of what has improved in the past decade – more jobs, lower property crime, better health – is down to individuals and communities acting on their own initiative. Brown needs to foster this, not close it down.

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