NHS services in Scotland are struggling to keep up with the demands of an ageing population, increasing costs, staff pressures and harsh saving targets, according to a critical report from Audit Scotland.

In its annual survey of the health service, the body warns that while the health budget jumped 2.7 per cent in real terms in 2015-16 to £12.2 billion, and that the workforce is at its largest ever with 138,458 full-time staff, this simply isn’t enough to keep pace.

The challenges are stark for the Scottish Government: in the last seven years the population aged 75 and over increased by 11.8 per cent, and drugs prices have risen 10 per cent.

In its report, Audit Scotland says that, overall, NHS Scotland failed to meet seven out of eight key performance targets, and that boards are struggling to meet the majority of key national targets in areas such as waiting times. They also warn that the planned shift in care from hospitals to the community has not happened.

While the Government has published several strategies for reducing the use of hospitals and supporting more people in the community, most spending is still on hospital and other “institutional-based” care. The NHS workforce is also ageing rapidly, and boards are having significant difficulties in recruiting and retaining staff. It also notes an increase in the amount of money spent on temporary staff.

Staff costs are still the largest spending area in the NHS. In 2015-16 they were £6.2bn, an increase of 6.4 per cent since 2010-11. A small number of individual consultants are being paid more than £400,000 to provide cover for periods of less than a year.

Health Secretary Shona Robison says the Government is making radical changes to the NHS to “equip our health service to continue to deliver excellent and safe care for the people of Scotland in the years ahead”.

The Tories called the report “damning” and Labour said Robison should make a statement to parliament to address the “failings”.

Caroline Gardner, Auditor General for Scotland, said: “Major challenges lie ahead for the NHS in Scotland. There are growing pressures on health boards which are struggling to juggle service delivery and progressing major reform whilst also managing considerable financial challenges.”

Royal College of Nursing Scotland director Theresa Fyffe said they had “been warning of the increasing pressures on NHS boards and integration authorities for some years now”.

“It is clear from the Auditor General’s report that we need to change the way we work in order to meet the increasing demand on services. How many more reports will be published by Audit Scotland before action is taken? Patients, staff and families deserve a decisive response from the Health Secretary,” Fyffe added.

Robison said the Government had made “significant improvements in the performance of the NHS” which had been “supported by a real terms increase in spending on our NHS”.

“Scotland’s core A&E departments have been the best-performing in the UK for the last 18 months, and 90% of all hospital patients rate their care and treatment as good or excellent.

“In addition, as Audit Scotland notes, overall staff levels are at their highest rate ever.

“And as this report confirms, the health budget stands at its highest ever level, with close to £13bn being spent in 2016-17.

“We have also committed to increase the NHS revenue budget by £500 million above inflation over the course of this parliament – which means that it will rise by almost £2bn in total.”

Labour Health spokesperson Anas Sarwar said: “The scale of mismanagement in our health service revealed by this report is utterly staggering. On every key test the SNP is failing. “

He added: “The SNP called Labour liars when we said local health services were under threat.

“This paper confirms that under the SNP, the NHS is facing a cuts bombshell with key services facing the axe.”

Scottish Conservative shadow health secretary Donald Cameron said: “This is a damning report and shows the dire state that our NHS is currently in.

“It paints a picture of an NHS in crisis, with short staffing leading to worsening patient care and budgets becoming increasingly under pressure.”