LONDON (Reuters) - The care of people with dementia needs to be urgently improved, the government's spending watchdog said on Wednesday.

"Despite a steeply rising trend in cases of dementia the condition is being given too low a priority by health and social services," the National Audit Office said.

"Too few people are being diagnosed, or being diagnosed early enough, and early interventions known to be cost effective are not being made widely available," it said.

At least 560,000 people in England suffer from the debilitating condition, with cases expected to rise by more than 30 percent over the next 15 years as the population ages.

The watchdog said dementia costs the economy 14.3 billion pounds a year, including annual direct costs to the National Health Service and social care of 3.3 billion pounds.

In a critical report it said only a third to a half of people with dementia ever receive a formal diagnosis.

Less than two thirds of family doctors surveyed by the audit office felt it was important to actively look for early symptoms of the condition.

Less than a third of the GPs felt they had enough training to diagnose and managed the disease.

"Without redesign, services for people with dementia are likely to become increasingly inconsistent and unsustainable," said John Bourn, head of the National Audit Office.

"Dementia can no longer be set aside. The issues raised in this report need to be addressed as a matter of urgency."

Health Minister Ivan Lewis said the government was committed to improving mental health services for older people.

"We know more needs to be done and we will use the findings from this report to help make further improvements."

The report comes a week after the High Court heard a test case challenging NHS restrictions on Alzheimer's drugs imposed by the government's drugs-pricing watchdog, the National Institute for Health and Clinical Excellence.

A ruling in the case is due to be given at a later date.