Extra health and social care funding is being used to tackle short-term pressures rather than long-term transformation, the National Audit Office (NAO) has warned.
The NHS received an additional £1.8bn Sustainability and Transformation Fund in 2016/17 to support the integration of health and social care at a local level.
This helped improve the health service's financial position - taking it from a £1,848m deficit in 2015/16 to a £111m surplus in 2016/17.
However, the NHS is still struggling to manage increased activity and demand within its budget.
The NAO report, published today, warned the NHS' efforts to balance its books had ‘restricted money available for longer-term transformation,' which auditors argued was ‘essential' for the sustainability of the health and social care system.
Head of the NAO, Amyas Morse, said: 'The NHS has received extra funding, but this has mostly been used to cope with current pressures and has not provided the stable platform intended from which to transform services.
‘Repeated short-term funding-boosts could turn into the new normal, when the public purse may be better served by a long-term funding settlement that provides a stable platform for sustained improvements.'
The NAO said progress had been made in creating 44 new sustainability and transformation partnerships (STPs) but it said their performance varied and their tight financial positions made it difficult for them to focus on long-term change.
The Chartered Institute of Public Finance and Accountancy (CIPFA) called on the Government to ensure STPs were given the necessary resources and the scope of the plans was more realistic.
CIPFA chief executive, Rob Whiteman, who chairs the East London Health and Care Partnership, said: ‘To ensure STPs can reach their full potential it is important that they are supported by a greater level of resources and that their plans are realistic.
'Otherwise, the transformation agenda will be jeopardised and services will continue to be at risk.'
Chairman of the Local Government Association's (LGA) community wellbeing board, Cllr Izzi Seccombe, added: ‘This alarming report shows that despite receiving £1.8bn in extra funding last year, the NHS is struggling to cope with the costs of increased demand and has not been able to make enough progress in the vital long-term transformation of services because it has had to spend most its extra money on current pressures.
‘Prioritising funding for the NHS over social care will not help reduce pressures on hospitals.
'Instead of making costly short-term bailouts to treat the symptoms of pressures, money would be better invested in treating the causes of these pressures.
‘Government needs to give urgent funding to councils to invest in prevention to reduce the need for people to be admitted to hospital in the first place, which will help to reduce costs to the public purse.'
