Labour will on Thursday pledge to roll back the dramatic extension of competition in the NHS that has occurred under the coalition if it wins next year's general election.

Andy Burnham, the shadow health secretary, will commit to scrapping Section 75 of the Health and Social Care Act as part of a dismantling of rules which Labour claims waste vital resources. Section 75 forces GP-led clinical commissioning groups to put local care services out to tender, even when existing NHS providers are doing a good job.

In a speech to senior NHS managers attending the annual conference of the NHS Confederation, Burnham will also promise that Labour would remove the duty on Monitor, the NHS's economic regulator, to promote competition in the health service.

Figures obtained by Labour under freedom of information laws show that hospitals in England are spending about £20m a year in order to ensure they are complying with the much more onerous rules on competition that the legislation brought in.

Hospitals now spend on average more than £90,000 each a year on staff and external expert advice to deal specifically with competition issues, such as possible mergers, acquisitions or changes to services, the figures show. For example, the hospital trusts in Bournemouth and Poole in Dorset between them spent £6.5m on a planned merger, including £1.3m on the competition issues raised. But the move was blocked as anti-competitive by the competition authorities, in a decision that prompted serious concern in the NHS as it was seen as blocking a number of much-needed mergers intended to improve care.

Competition is the wrong approach when the demands of dealing with an increasingly elderly population mean the different parts of the NHS need to be working ever more closely together, Burnham will say.

"At a time when NHS money is tight, squandering money on competition lawyers cannot be justified in any way, shape or form. Such is the scale of the financial and demographic pressures that we should be bringing down the barriers to integration, not building more.

"Markets are a barrier to the real reform that the NHS needs to make. We should be building one team around the person, not increasing the number of providers dealing with the person's care and intensifying their frustration of telling the same story to everyone who comes through the door," Burnham will tell the 2,000 delegates.