Danny Higginbotham says Manchester United have not improved despite spending more than £250m on new players under Louis van Gaal.
United's elimination from the Champions League on Tuesday was the latest setback in a strange season for the former Premier League champions.
While United sit just three points off the top of the table domestically in fourth place, they have been repeatedly criticised for their style of play in recent weeks.
Following their 3-2 loss to Wolfsburg, they are without a win in four games, have won just three of their last 11 matches and have recorded five 0-0 draws in that sequence.
A lack of goals has been the biggest issue for many fans of Van Gaal's side, with chants of 'attack' becoming more commonplace at Old Trafford.
While the Dutchman maintains his team have made progress, Higginbotham - who made four appearances for United - disagrees and sees the absence of a cutting edge as a standout issue.
Asked on Sky Sports Now if his former club have got better, he said: "Not when you look at how much money they've spent, no.
"There's a big emphasis on the defence, it's very much a 'don't lose' team. It shouldn't be like that with Manchester United.
"The problem is they were a bit more expansive yesterday but they conceded three goals. That's why they are so strong defensively, because it's to the detriment of the forward players."
Higginbotham expects finishing third in their Champions League group and consequently dropping into the Europa League to have a negative impact on United's spending next month.
He believes a move to Old Trafford might be less attractive to prospective signings now and added: "It's very damaging. I think it's going to have a huge domino effect.
"If you look at the Premier League, everyone talks about how it affects it when you play on the Thursday and the Sunday but for me, you look at the January transfer window.
"It's going to be a very important time for a lot of clubs and if United were looking to sign players, I think it was going to be a lot easier if they were in the Champions League than the Europa League.
"Now other teams are going to come into contention as well so I think there's a real knock-on effect from what should have been quite a straightforward group to get out of."
Higginbotham also questioned Van Gaal's team selection in Germany, where he handed youngster Guillermo Varela his first start for the club.
Jesse Lingard was also included ahead of the more experienced Michael Carrick and Ashley Young against the Bundesliga side.
"I didn't understand the Varela/Lingard situation," Higginbotham said. "Wolfsburg are very, very strong down the left hand side.
"They play [Ricardo] Rodriguez who had to go off with an injury and then you've got [Julian] Draxler and [Andre] Schurrle and what they did from the first minute was target down that side.
"What Varela was doing more often than not was playing really narrow. It's the naivety of youth and it led to so many opportunities.
"If you look at the goals United conceded, each time they scored Wolfsburg then scored within two or three minutes.
"That tells me there's a lack of experience in the team and a lack of leadership. When you get yourself in that situation, you get as many experienced players into that team as possible.
"Manchester United is a club that has always brought young players through. The Class of 92 was a one-off and will never happen again but they were bedded in slowly.
"They weren't brought in to make one of their first games for the senior team in such an important game and I think that's the difference."