A staffing crisis crippling NHS finances may take years to resolve, the National Audit Office has warned - with officials accused of making “pie in the sky” assumptions about how savings can be made.

Almost every NHS authority drawing up plans for cuts to services already has dangerously high levels of bed occupancy, new research suggests.

Health services have been ordered to make sweeping changes to make £22bn in savings, while meeting unprecedented demand from an ageing population.

But the new NAO report says hospitals spent £3.7 billion on agency staff in the last financial year, contributing to a £2.45 billion shortfall, a trend NAO branded “unsustainable”.

The report suggests DoH plans to save £22bn by “moderating the growth in demand” from patients and capping pay may be unrealistic and have not been properly tested.