SCOTLAND’S NHS is struggling to keep up with the challenges of an unhealthy population, less money, difficulties in recruiting staff, more expensive medicine and “a demanding public and political environment,” according to Audit Scotland.

In their annual report on the state of the health service, the inspectors said while significant progress had been made more had to be done “if transformational change is to happen.”

Although the health budget was £12.9 billion in 2016/17 – 43 per cent of the Scottish Government budget, up from 38 per cent in 2008 – unprecedented levels of savings of almost £390m had to be made.

Under strict Government rules, the boards have to make sure their budgets break even at the end of the financial year.

“This is becoming harder to achieve each year and current approaches are unsustainable,” the inspectors say.

Staff costs are the biggest expense for boards. Last year they spent £171m on agency staff, an increase of 79 per cent in real terms over the past five years, though spending was down on the previous year.

On the health of the nation, the auditors paint a grim picture, saying significant inequalities remain. “Life expectancy is lower than in most European countries and improvements have stalled in recent years. Smoking rates have continued to reduce but drug-related deaths increased significantly in 2016/17 and are now the highest in the EU.”

The majority of key national performance targets “were not met in 2016/17 and wider indicators of quality suggest that the NHS is beginning to struggle to maintain quality of care.”

The report adds: “People are waiting longer to be seen with waiting lists for first outpatient appointment and inpatient treatment increasing by 15 per cent and 12 per cent respectively in the past year.”

While general practice is “central to changing how health services are accessed and used,” there are significant challenges for Scotland with “difficulties in recruiting and retaining GPs and low morale, and a lack of data on demand and activity”.

There were some positives too. Overall, patient satisfaction is high, inspectors found, staff are committed, and the NHS is held in high regard.

The auditors also praised progress that has been made, such as in the integration of health and social care and reducing “delayed discharges” – the so-called bed blocking – but made a series of recommendations for the Government, NHS boards and integration authorities.

These include developing a long-term framework clarifying how moving care into the community will be funded along with greater flexibility for NHS boards on financial planning.

Caroline Gardner, Auditor General for Scotland, said: “There is no simple solution, but these fundamental areas must be addressed if reform is to deliver the scale of transformation that’s needed across the NHS.”

Health Secretary Shona Robison said: “Under this administration there have been significant improvements in Scotland’s health system, driven by our clear vision for the future of the NHS in Scotland. Life expectancy is rising, our A&E departments have outperformed the rest of the UK for over two and a half years, and survival rates for chronic conditions such as heart disease have improved.”

Scottish Labour Health spokesperson Anas Sarwar said it was “time for Shona Robison to go as Health Secretary.”

He added: “A year ago Audit Scotland published the worst state of the NHS report since devolution. Twelve months on and standards have either stalled or declined. This is happening amidst a backdrop of underpaid, undervalued and under-pressure staff.”

Tory shadow health secretary Miles Briggs said: “This report exposes just how badly the SNP has mismanaged the NHS “.