Enormous increase in nhs spending on management consultants, uk

Enormous increase in nhs spending on management consultants, uk

The amount of money PCTs (primary care trusts) are spending on management consultants has risen enormously, according to Pulse. In comparison to two years ago, the amount PCTs spend during the last financial year on external consultancy fees has risen threefold, according to figures compiled from 62 trusts.

An analysis of figures obtained under the Freedom of Information Act revealed that each trust spent an average of £1.217m on external consultants in 2008/9 - compared to £361,000 in 2006/7. After factoring in expenditure on legal and professional fees, the average total expenditure on external companies for 2008/9 is £1.568m.

The disclosure comes just weeks after the Treasury told the Department of Health to make massive efficiency savings as its contribution to managing the financial crisis.

Individual PCTs have paid consultants hundreds of thousands of pounds for support with the Government's flagship World Class Commissioning project, while GP-led health centre procurements, polyclinics and local access initiatives have added to the enormous costs.

NHS Tower Hamlets, praised by ministers as a trailblazing PCT, reported the most extensive use of external consultants. It spent £5.682m on several projects last year, eight times what it spent in 2006/7, claiming there were 'clear benefits' for patients.

Dr Anna Livingstone, a GP in Tower Hamlets, said: "I'm concerned about these vast levels of expenditure on consultancies - out of all proportion to NHS pay - and the lack of transparency. Many of us are concerned that this is part of the marketisation of care."

McKinsey, PriceWaterhouseCoopers, Tribal Consulting and Finnamore Management Consultants were among those employed by several trusts across nationwide.

McKinsey - a company Pulse revealed last week has been hired by the Department of Health for an undisclosed fee to develop a model balanced scorecard for PCTs - last year was paid more than £4m just by Tower Hamlets.

The British Medical Association (BMA) reacted angrily to Pulse's findings, warning a 'huge sum of money' had been removed from patient care.

Dr Chaand Nagpaul, GP committee negotiator, BMA, said: "It is extremely concerning that such large sums are being spent on management consultants, in the absence of any evidence of their effectiveness. It's ironic that at a time when GPs are unable to receive the resources they need to make practice-based commissioning work, we're seeing money thrown at the private sector to advise PCTs."

Richard Hoey, editor of Pulse, said: "It's startling just how quickly consultancy fees have grown from a luxury trimming to a core part of NHS expenditure. 'We know that in many areas where external consultants have been hired, NHS staff would have been prepared to offer analysis and advice at a fraction of the cost. 'It is now essential trusts are transparent about what benefits they have accrued through their use of management consultancy firms, in terms of concrete improvements in the way care is delivered, rather than presentational gloss."

Although some of the consultancy contracts were related to clinical work, most of them were clearly for business advice, many linked to the World Class Commissioning drive.

NHS South West Essex, which saw its spending on consultants rise by more than £3m last year, blamed the rise on filling staff vacancies, organisational changes resulting from World Class Commissioning and the separation of its PCT provider arm.

NHS Richmond spent £243,276 on World Class Commissioning in 2008/9, while NHS Great Yarmouth and Waveney spent £150,000 on the same strategy and a further £48,578 on 'the development of a World Class Communications and Engagement Strategy'.

A Google map of the FOI response from each PCT.

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Section Issues On Medicine: Medical practice