Sacking bad police officers must be made easier, Conservative leader David Cameron said as he urged reforms.
"An underperforming police officer is almost unsackable," he said in a speech in east London.
Mr Cameron wants local flexibility on pay and conditions so that officers are not paid simply for long service or seniority rather than performance.
Home Office Minister Hazel Blears said crime had already fallen and said Mr Cameron's speech was "light on detail".
'No blank cheque'
Stressing the importance of tackling disorder, Mr Cameron said: "You can't be tough on crime unless you're tough on police reform."
Mr Cameron said there was little evidence that police performance had increased in line with increased resources, with each officer making less than 10 arrests on average every year.
"The Conservative Party has always valued and supported the police but there cannot be a blank cheque," he said.
"More resources must be matched by better performance. The public expects value for money."
Mr Cameron said employment practices mean it is difficult to sack poor officers once they have passed their 18-month probationary period.
"Police pay and conditions must be modernised to ensure much better police performance," he said.
"That means, amongst other things, making it easier to sack bad officers."
He said flexibility was needed in the police.
"Here is my offer to Britain's police. You make the changes which will improve police performance and we will stop the centralisation and political interference that gets in your way."
Mr Cameron wants officers to be rewarded for improving their skills.
And he would change police pensions to allow those who are no longer physically able to be on the front-line to change careers without losing out.
Officers had a huge incentive to wait around until they had been in the force for 30 years before getting a pension, he said.
In an attempt to give greater local accountability to police forces, Mr Cameron also proposed the abolition of the National Police Plan.
He also wanted changes to make forces more accountable to local communities - possibly through elected police commissioners.
And he said plans to merge some police would make them less accountable to local people.
Home Office minister Hazel Blears argued the government was already giving communities new powers to hold police and local councils to account over crime concerns.
A "push from the centre", coupled with action by local commanders, had seen crime cut by a third, she said.
Ms Blears said: "Many of the things David Cameron mentioned we are already doing and going further."
Asked if bad officers should be sacked, Ms Blears said there were mechanisms to deal with disciplinary matters.
Jan Berry, chairwoman of the Police Federation, urged the Tories to talk to officers to make sure any reforms could work on the streets.
She said recent reforms should be allowed time to see whether they worked.
Both Ms Blears and Lib Dem home affairs spokesman and leadership contender Mark Oaten said the police did a "fantastic job".
Mr Oaten said it was far from clear the Tory reform plans would work in practice.
"Proposals for performance-related pay are unpopular in the police and would set officer against officer," he said.