There has been a "disastrous failure" of NHS workforce planning creating a "boom and bust" approach, MPs say.
Nurse numbers have increased way above target
The Health Committee said little thought was given to long-term planning as managers strived to hit "demanding" government targets.
MPs said vast rises in staff numbers had been followed by redundancies, cuts to training and recruitment freezes.
They added regional health bosses had to make planning more of a priority and ministers stop "micromanaging".
The findings come after leaked Department of Health planning documents at the start of the year showed there would be a shortage of GPs and nurses and too many hospital consultants in four years time.
It said there had been a "yo-yo attitude to planning".
The MPs said workforce planning was a "vitally important process" as 70% of NHS funding is spent on staffing costs, but it had been a "disastrous failure".
They said the NHS has ended up employing too many staff, relying heavily on overseas recruitment, in a bid to meet "demanding" government targets.
Between 1999 and 2004, nursing numbers increased by more than 67,000 - 340% in excess of original targets. During the same time, GP numbers swelled by more than 4,000 - double the initial target.
MPs said this had been at the expense of long-term sensible planning and created a "boom" and "bust" situation in the last eight years where the increases in staff numbers were being followed by redundancies, training cuts and newly trained staff not getting jobs.
It also said: "It was too easy to throw new staff into the task of meeting targets rather than consider the most cost-effective way of dong the job.
"Large pay increases were granted without adequate steps being taken to ensure increases in productivity in return."
It said workforce planning should remain the responsibility of strategic health authorities, regional bodies which oversee hospitals and local health trusts, but they must give it more priority and employ planners of the "highest quality".
The committee also said strategic health authorities needed more support from the Department of Health, which must provide them with better information and "stop micromanaging".
Committee chairman Kevin Barron said: "Improving workforce planning is crucial if the health service is to respond effectively to future change and provide value for money for taxpayers."
Shadow Health Minister Stephen O'Brien said: "Last year Patricia Hewitt blamed the cash-crisis in the NHS on it employing too many staff.
"But we know that it's her department who forced this desperate situation."
Dr Sam Everington, deputy chairman of the BMA, said: "While agreeing wholeheartedly that integrated workforce planning must be a priority for the health service, we do not agree that the expansion of the medical workforce was reckless and uncontrolled and that pay increases for doctors have not seen a return in productivity.
"The UK is still critically short of doctors."
But Sian Thomas, deputy director of NHS Employers, said: "Workforce planning has always been a huge challenge in healthcare.
"It isn't an exact science and the time it takes to train a healthcare professional means that the way services are provided may have changed in the meantime."
Health Minister Andy Burnham said: "We are now in a more stable position with our workforce where there is a closer match between affordable demand and supply.
"The focus now is on improving the skills, flexibility and productivity of our frontline staff."