It has pointed to NHS England and Capita's misunderstanding over the risks in outsourcing these services as the main reason that caused widespread failures experienced by primary care practitioners, including dentists.
"While not without its difficulties, by making this change over the past two years the NHS has successfully saved taxpayers £60m, as the NAO themselves confirm", NHS England said. No actual harm to patients was identified.
Three years ago Capita was contracted by NHSE to provide primary care support services, a £330 million seven-year deal that covered payments to pharmacies, GP practices and opticians, the administration of pensions of Global Positioning System and changes to the lists of health practitioners to ensure they are suitably qualified and have passed the relevant checks.
It kept health workers form the frontline and meant NHS England had to pay out for lost earnings.
In a report published today, the NAO is critical of NHS England's failure to recognise the complexity of its contract with Capita and of the limits on its ability to hold Capita to account and to intervene to prevent issues from snowballing. Capita could not cope with the resulting "significant increase" in complaints, the report said.
The public body was, for example, "contractually unable to stop Capita's aggressive [primary care support] office closure programme, even though it was having a harmful impact on service delivery".
Prior to the contract award, primary care support services were commissioned locally by primary care trusts - delivered by 1,650 staff from 47 local offices.
Duties transferred to Capita included sending out test results, moving patients' medical records, processing patient registrations and paying GP practices.
The outsourcing company Capita and NHS England are still bickering about the deal, leading to failures including a backlog of half a million patient registrations, the NAO warns. It made a decision to outsource the service as it lacked the necessary skills to transform services through better use of IT, the NAO said.
Gordon Hockey, director of operations and support at the PSNC, who contributed to the NAO investigation using evidence gathered from contractors and LPCs, said: "The conclusions of the NAO will come as no surprise to the many community pharmacies and LPCs who have reported problems with PCSE services provided through Capita".
"We have accepted accountability for not meeting our high standards of service previously", he added.
'As the NAO points out, value for money is not just about cost reduction, ' Optical Confederation chair, Fiona Anderson, said. They said both parties are now much better informed about the services and challenges they face.
The auditors called for consideration as to whether elements of the contract should be taken back in-house.
"Trying to slash costs by more than a third at the same time as implementing a raft of modernisation measures was over-ambitious, disruptive for thousands of doctors, dentists, opticians and pharmacists and potentially put patients at risk of serious harm", she said.
A Capita spokesperson acknowledged that the complexities of the services being outsourced were not properly understood before the contract was signed.
The report said Capita "acknowledges that it made performance issues worse" when it continued to close support offices in the summer of 2016 "even though it was aware" its customer service centre "was struggling to meet demand".