The Department of Health and NHS England paint an "unduly healthy picture" of the state of diabetes services in England, MPs have said.
The Public Accounts Committee said weaknesses in the approach of both organisations - and a lack of focus on preventing long-term complications from the condition - mean "the costs of diabetes to the NHS will continue to rise".
MPs found that while evidence suggests the UK performs well compared to other countries, there are still "unacceptable variations" in how people with diabetes are able to access education about their condition.
Furthermore, only 60% receive the annual checks recommended to keep them healthy and prevent long-term complications.
The report said diabetes specialist staffing levels in hospitals "are not keeping pace" with the increasing percentage of beds occupied by diabetes patients.
It said: "The percentage of beds in acute hospitals in England occupied by people with diabetes continues to rise, from 14.8% in 2010 to 15.7% in 2013.
"However, the level of diabetic specialists has not significantly changed over this period. In 2013, nearly one-third of hospitals in England taking part in the audit had no diabetes inpatient specialist nurse and 6% did not have any consultant time for diabetes inpatient care.
"NHS England told us that an increase in nursing numbers isn't likely in the next year or two."
MPs found that targets to improve diabetes care were not being adhered to, including one set by the Department of Health which said that by 2018, 80% of patients should receive all the nine care checks recommended to keep them healthy.
The report said: "When pressed on progress against the 80% target, NHS England told us that it did not "believe" that it was working towards this target any more, but seemed uncertain, and the department was non-committal."
In 2013/14, there were an estimated 3.2 million people aged 16 years or older with diabetes in England. The condition is estimated to cost the NHS £5.6 billion a year.
The Government has introduced a new NHS Diabetes Prevention Programme to try to stem the numbers of people developing Type 2 diabetes.
Type 2 is linked to unhealthy lifestyles, and the new programme aims to help people lose weight and move more.
But the report said this "by itself, this will not be enough to stem the rising number of people with diabetes".
Meg Hillier, chairwoman of the committee, said: "The NHS and Department for Health have been too slow in tackling diabetes, both in prevention and treatment.
"The number of people with diabetes is increasing, as is the number of patients who develop complications. It is a very serious condition that can have a huge impact on people's lives. Yet support available to patients and those at risk varies hugely across the country.
"There's clear evidence of what works and as a priority action must be taken to ensure best practice in treatment and education is adopted across the board.
"Taxpayers must have confidence that support is available when and where they need it, rather than by virtue of where they live."
A Department of Health spokeswoman said: "The NHS has made big improvements in diabetes care by reducing mortality and complications arising from the disease - but any variation in care as this report highlights is deeply concerning.
"That's why we are creating a national diabetes prevention programme, the first of its kind in the world, so that we help people avoid developing this devastating condition in the first place."