Failure to help hundreds of thousands of addicts get free of drugs is costing Britain £3.6bn a year in welfare and prescriptions for methadone, according to a report released today.
The Centre for Policy Studies think-tank accuses David Cameron of failing to deliver on his pledge to help people get off drugs.
The report, Breaking the Habit: Why the State Should Stop Dealing Drugs and Start Doing Rehab, cites comments made by the Prime Minister late last year, when he described methadone as "a government-authorised form of opium".
Mr Cameron pledged to provide more residential treatment programmes and added: "The way you get drug addicts clean is by getting them off drugs altogether, challenging their addiction rather than just replacing one opiate with another."
Yet while the heroin substitute remains a common treatment for addicts, the number of referrals to rehabilitation units has fallen to an all-time low of 3,914. There are only 1,872 beds now available at "affordable" levels of around £500-£600 per week, with none on the NHS, and the sector is "in near-terminal crisis", according to the report.
Its author, Kathy Gyngell, said: "By sponsoring addiction, drug treatment has entrenched a costly dual dependency – on drugs and on welfare."
Three-quarters of those in treatment programmes are on methadone, amounting to 150,000 people. Many people spend years on the drug, which now accounts for a quarter of all drugs poisoning deaths, says the report from the right-wing think-tank.
The latest figures on prison drug tests, obtained by The Independent on Sunday, reveal 3,500 inmates tested positive for prescribed and illicit methadone – a 55-fold increase over the previous five years.
Methadone became a recommended treatment for heroin addicts in the late 1980s, when the Advisory Council on the Misuse of Drugs declared that the spread of HIV/Aids was a bigger threat to the public than drug misuse. Prescribing methadone – a drug that stops heroin addicts from experiencing the pain of withdrawal – and providing clean needles for addicts were part of a "harm reduction" response to drug addiction that continued under New Labour.
The cost to the state of maintaining addicts on methadone has doubled since 2002-03 to £730m a year. Drug users are estimated to receive £1.7bn in benefits a year, while the welfare costs of looking after the children of drug addicts are estimated at a further £1.2bn a year.
The report comes just weeks after British celebrities urged Mr Cameron to decriminalise drug possession, and the Global Commission on Drug Policy said that the war on drugs had failed and that it was time for "fundamental reforms" in drug policies.
A Department of Health spokesperson said the Government's drugs strategy, which includes the use of "talking therapies", detox and drug-based treatments is "fundamentally different from those that have gone before".
He added: "Instead of focusing on reducing the harms caused by drug misuse, our approach will be to go much further and offer every support for people to choose recovery as an achievable way out of dependence."
"There is no 'one-size-fits-all' solution," said Martin Barnes, chief executive of DrugScope. "Access to a range of services and support is vital to supporting recovery, regardless of the types of treatment provided."