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Exclusive: Government spending on management consultants trebles in three years

BMJ 2019; 366 doi: https://doi.org/10.1136/bmj.l5404 (Published 05 September 2019) Cite this as: BMJ 2019;366:l5404
  1. David Oliver
  1. Reading

The government’s spending on management consultants in the NHS has trebled during 2016-19 despite pledges by successive health secretaries to curb spending on external advisers.

The Department of Health and Social Care and its arm’s length bodies spent £22.65m on management consultants in 2018-19, up from £14.10m in 2017-18 and £6.53m in 2016-17, showed figures obtained under freedom of information. Non-departmental public bodies in these figures included the Care Quality Commission and NHS Improvement but not NHS England.

The increase occurred despite a target set by the former health secretary Jeremy Hunt in 2014 to save £10bn from the health budget by 2020 by cutting spending on management consultants, temporary agency staff, prescribing errors, and preventable harm, among other things.1

The findings on these central bodies are out of kilter with trends in the rest of the NHS. The response revealed a rapid reduction in spending among service providers and commissioners, which have spent less than half on management consultants in three years than they previously spent in one year: 2013-14, when they spent £640m.2

Providers’ spending fell from around £260m in 2016-17 to £227m in 2018-19, and spending by commissioners fell from £101m to £64m over the same three years.

The department did not have separate figures on NHS England’s spending on management consultancy—another non-departmental public body whose costs were included in the commissioner figures.

Poor value

In 2018 NHS Improvement paid over £500 000 of public money to the consultancy McKinsey to help it define its own responsibilities, having spent £630 000 on the same kind of work just two years before, said reports by the Health Service Journal3 and Consultancy.uk.4 This year NHS England also spent £200 000 on a similar project, the same journal reported.5

The National Audit Office criticised rising government spending on consultancy in 2016, and in 2018 a multicentre study by researchers at Warwick Business School concluded that consultancy spending not only represented poor value but was associated with greater inefficiency.6

The freedom of information request asked the health department how many of its former employees had moved straight to consultancy firms, how many current employees had come from them, and how many temporary workers were seconded from them. But the department was unable to answer this, saying that the information was not recorded.

Some see the “revolving door” between government and consultancy agencies as improper because of the influence that senior civil servants can yield on public policy, whereas others—including Sally Davies, England’s chief medical officer—would like to see more skills cross over.7

A source said, “They really ought to have the information on where staff are seconded from.”

Limited local knowledge

Commenting on the figures, Saffron Cordery, deputy chief executive of NHS Providers, said that all NHS organisations should be driving down their spending on external consultants. She said, “The NHS front line is clearly working hard on this and succeeding, but the centre does not appear to be following this trend, nor its own guidance to the NHS as a whole.”

Cordery conceded that, “at a time of significant change in a sector or organisation, sometimes external help is important or necessary.” But she emphasised the need to assess value for money in any government consultancy spending and to better define what was or was not legitimate use.

Helen Buckingham, of the Nuffield Trust think tank, told The BMJ, “Management consultancy in the NHS adds most value when commissioned by local organisations to address specific issues requiring capacity or expertise going beyond usual business or where a neutral external perspective is needed. National bodies have limited capacity and, without good local knowledge, are not well placed to do so.”

A spokesperson for the Department of Health and Social Care said, “We are committed to spending taxpayer money in the most cost efficient way, ensuring every penny counts, and overall spend on consultancy across the [department] and the NHS has decreased by over £50m since 2016-17.

“We only use external consultancy services when it is necessary and the most cost effective option, such as bringing in additional expertise for short term projects requiring specialist skills.”

Footnotes

  • Correction: On 5 September we changed this story to amend a quotation.

References

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