In a speech delivered at the RSA in London, the Prime Minister said that he wanted to make the nation's schools and hospitals among the best in the world, opening them up and making them competitive, more local and more transparent.
'We must champion excellence - and stop the slide against our competitors.”
'In Shanghai the average child is two years ahead of a child here.”
'In Denmark, Sweden, Norway, Austria and Poland you are less likely to die once admitted into hospital after a heart attack.”
'Put simply: we can't be a modern success story unless we have modern, successful public services.”
'And this is not an alternative to dealing with our debts - it's a key part of it.“
'Like every other western industrialised nation, we won't sustainably live within our means with unreformed public services and outdated welfare systems.'
Speaking on the Health and Social Care Bill, Health Secretary Andrew Lansley, echoed the Prime Minister's words.
'If we want to deliver better results for patients, we must modernise our NHS and start now,' he said.
'With ever-rising demands on services, survival rates for conditions such as cancer and stroke lagging behind our European counterparts and with administrative costs having spiralled over the past decade, there is no alternative.'
Click here to read the Prime Minister's speech in full.