Its annual review of the NHS found that performance continued to decline in 2017/18 and said the NHS is not financially sustainable in its current form. Pressure is building in several areas, including major workforce challenges, rising drug costs and a significant maintenance backlog.

In 2017/18 the health budget was £13.1bn, or 42% of the total Scottish budget. Taking into account inflation, this was a 0.2% decrease from 2016/17. NHS boards struggled to achieve what the report described as ‘unprecedented’ savings of £449.1m.

The report found NHS boards are struggling to break even, relying increasingly on Scottish government loans and one-off savings.

In 2015/6 the boards predicted a combined surplus of £500,000, but reported £99.3m deficit last year, which is predicted to hit £131.5m this year. Audit Scotland's report said 50% of savings last year were one-off cuts that could not be repeated, up from 20% in 2013/14. At the start of 2017/18, NHS boards were unable to identify where 28% of all planned savings would come from, up from 3% five years ago.

No NHS boards were able to meet all eight key national targets and performance against these targets declined nationally. More people waited longer for outpatient and inpatient appointments. Only one of the eight key performance targets was met nationally.

The NHS also faces significant workforce challenges, with difficulties recruiting and increases in sickness absence and staff turnover. Boards are also considering the potential impact of EU withdrawal on areas such as staffing, the supply and cost of drugs, and food prices.

The Scottish government has stated it wants to transform the healthcare system so that everyone can live longer, healthier lives at home or in a homely setting by 2020. Significant activity is underway to work towards this, but progress is too slow, according to the review.

Audit Scotland said the Scottish government's recent health and social care medium-term financial framework and other measures are welcome steps, but more needs to be done, and it will be carrying out further work to understand how this new approach will work in practice.

Caroline Gardner, auditor general for Scotland, said: ‘The scale of the challenges facing the NHS means that decisive action is needed now to deliver the fundamental change that will secure the future of this vital and valued service.

‘Alongside longer term financial planning, this must include effective leadership, and much more engagement with communities about new forms of care and the difference they make to people's lives. This will help to build support among the public and politicians for the changes required.’

NHS in Scotland 2018 is here

Report by Pat Sweet