The NHS has had its best year ever "for losing staff" and "wasting money", the leader of Britain's hospital consultants said today.

The comments by Paul Miller, chairman of the British Medical Association's consultants committee, were a jibe at the health secretary's recent defence of record health service debts.

Patricia Hewitt claimed in April that the NHS had never had it so good, but Dr Miller today accused the government of wasting billions of pounds on private sector reforms and management consultants.

He told the BMA's consultants conference in London that ministers had inflicted "bad policies and shocking incompetence" on the NHS: The introduction of private treatment centres had led to health trusts being charged hundreds of billions of pounds for unnecessary work; private funding to build hospitals was burdening trusts with long-term debt; and private management consultants were receiving huge payments despite failing to improve NHS performance.

"This has been the NHS's best year ever ... for management consultants ... for losing staff ... for wasting money," he said.

Dr Miller laid much of the blame for the financial problems of NHS trusts on the government's "excessive keenness and liking for expensive management consultants".

He estimated that private management consultants were costing around £3bn a year and used the work of private managers in Department of Health-appointed "turnaround teams" sent into 18 trusts with financial difficulties as examples of wasted money. This included £700,000 paid to management consultants for three months' work at Surrey and Sussex trust, despite the fact it still finished the last financial year with "an operating deficit of £28m and an accumulated deficit of over £57m".

The multi-billion pound contracts awarded to independent sector treatment centres were also a waste of money, Dr Miller said.

Calling for a moratorium on any other private treatment contracts, he said Oxfordshire primary care trust had been made to pay £500,000 a year for the next four years to a private eye clinic despite there being no shortage of NHS capacity to do the work.

He said only 160 of the 400 operations planned in the contract annually were carried out last year. This was unnecessarily inflating local NHS debt, which stands at around £82m.

The government private finance initiative (PFI), under which trusts pay back loans from the private sector to build hospitals with interest over 20-30 years, was also criticised. Dr Miller highlighted £130m wasted on three deals: the abandoned Paddington PFI scheme, which cost £14.9m; the delayed Barts PFI scheme, which cost an extra £35m; and the Norfolk and Norwich PFI, under which the NHS missed out on £82m when the private contractors refinanced the deal.

"If you had made this up, you would be laughed at," Dr Miller said. "If you were the one who did make this up, you should be ashamed. If you continue to make it happen, you will destroy the NHS. This is not the way to run our NHS. Something is going very badly wrong with these health policies. It is time to call a halt. Examine what is not working and why.

"It is hard to avoid the conclusion that we are working in a service which is being broken by policies which do not work; devised by officials who have resigned; implemented by managers who don't believe [in the NHS]; and patients without a say."

Dr Miller called on the health secretary to transfer the running of the NHS to an independent organisation to ensure it was free from political interference.

His speech, which got a standing ovation, was echoed by criticism of the government made by delegates.

Simon Smith, a surgeon with Shropshire Country primary care trust, said: "Government and departmental planning exists in a twilight zone divorced from reality."

Tom Smith, a senior policy analyst at the BMA, claimed the government was hiding the true scale of NHS debts: "Patricia Hewitt says only 6% of trusts are in debt, I don't believe that".

A member of the BMA's consultants committee, Dr Anna Athow, said the government had allowed the NHS to get into the current financial crisis in order to ration services and push more resources and patients into the private sector.