Parts of the NHS are “seriously financially unstable” and trusts are building up levels of debt they are unlikely to ever repay, according to Whitehall’s spending watchdog.

The National Audit Office found that NHS provider trusts reported a combined deficit of £827m and clinical commissioning groups (CCGs) a £150m deficit in the financial year ending 31 March 2019.

It said extra money provided by the government to stabilise the finances of individual NHS bodies had not been fully effective.

Trusts in financial difficulty were increasingly relying on short-term loans from the Department of Health and Social Care (DHSC), the auditors said. The loans were in effect being treated as income by trusts who had built up debts totalling £10.9bn in March 2019.

Meg Hillier, the chair of the public accounts committee, said the NAO reports showed that the NHS was “addicted to unacceptable short-term fixes” to cover longstanding problems.

“Hospitals have built up loans they’ll never repay, workforce shortages continue and waiting times are getting longer. There is no long-term plan for social care in sight, but what is clear is the lack of investment in public health, equipment and buildings. It is the start of a new parliament and the Department of Health and Social Care needs to urgently get a grip and wisely use the new money it’s been given,” she said.

One NAO report looked at the finances of the NHS as a whole and the financial performance of individual NHS organisations. A second examined the NHS’s capital budget, which is for replacing and maintaining equipment and buildings.

The auditors noted that patient waiting times continued to get worse and the number of people waiting for treatment continued to increase. They found that the health service had failed to achieve “the fundamental transformation in services and finance regime needed to meet rising demand”.

The first report said: “Trusts are becoming increasingly reliant on short-term measures, including one-off savings – rather than more permanent year-on-year savings – to meet yearly financial targets. Short-term fixes have made some parts of the NHS seriously financially unstable.”

In the past five years the government has transferred £4.3bn from capital to revenue budgets to help the NHS cope with day-to-day pressures. The second NAO report said ministers had been unable to clearly say how this had affected patient services or demonstrate their approach to capital funding reforms.

Auditors found that the rising demand for capital spending and the growing maintenance backlog meant there was an increasing risk of harm to patients.

Over the last three years, NHS providers had requested on average £1.1bn more for buildings and equipment than their spending limits allowed, they said. The backlog of maintenance work to get all buildings up to standard stood at about £6.5bn, the report said.

Gareth Davies, the NAO’s head, said the short-term fixes introduced to manage the NHS’s finances were not sustainable. “The Department of Health and Social Care continues to provide some trusts with short-term loans just to meet their day-to-day costs with little hope they will be repaid. This is not a sustainable way to run public bodies,” he said.

In June 2018 the government announced a long-term funding settlement for the health service under which NHS England’s budget was to grow by an average of 3.4% a year in real terms over the next five years.