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Chancellor George Osborne must create a more "joined-up" approach to spending cuts to deliver true value for money, a Conservative think-tank has warned.

The Centre for Social Justice accuses the government of a "blunderbuss" approach to reducing spending.

The group, set up by Work and Pensions Secretary Iain Duncan Smith, says setting overall savings targets could hit schemes already giving good value.

But the Treasury said it would protect frontline services.

The chancellor has asked most Whitehall departments to set out how they could save 25% to 40%

The Centre for Social Justice report says ministers may be tempted to cut each existing project's budget, instead of getting rid of those which are failing.

It calls for more focus on the long-term outcomes departments want to see, and their costs and savings implications.

The centre's executive director, Gavin Poole, told the 91�ȱ�: "If we are making cuts, which we absolutely endorse, we must question which are a good thing for the country.

"If we are making decisions on cutting back programmes, look at what the implications are in the long term."

He urged "keeping some of the costs", adding: "The really important thing for any department is whether they are building up a massive increase in costs for the future."

Mr Poole also said: "Where is the joined-up approach across government departments? So that you are not taking out programmes from, say, the Department of Health and it's having a bigger impact on the 91�ȱ� Office, or you're not cutting programmes from the Department for Education and that's going to have a bigger impact on the Ministry of Justice.

"So, where is the strategic guidance sitting above all this decision-making process?"

The centre's report, which has been submitted to Mr Osborne, recommends following the US state of Washington, which set up an institute to look at the cost-effectiveness of social spending.

Its initiatives included an early-intervention nurse-family partnership which generated three dollars in savings for every dollar spent, it adds.

Shadow work and pensions secretary Yvette Cooper said: "Even the right-wing think-tanks have recognised that an obsession with short-term headline cuts could do lasting damage and cost us all more in the long run.

"Cutting things like Sure Start, or the Future Jobs Fund which helps young people into jobs, will push up the bills of dealing with family problems or unemployment later on.

"The government should urgently review its approach."

But a Treasury spokesman said: "The Spending Review [in October] will represent a complete re-evaluation of the government's role in providing public services. It will ensure that 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.

"As part of this, departments will need to publish business plans to demonstrate the resources, structural reforms and efficiency measures that they will need to put in place to protect and improve the quality of key frontline services."

Mr Duncan Smith founded the Centre for Social Justice in 2004 after losing the Conservative leadership and stepped down as chairman when he became a cabinet minister in May.