NHS Spends £640m on Management Consultants in 2014

Posted By admin - 20th December 2014

It has recently been revealed that the NHS spent a whopping £640m on Management Consultants in 2014, more than double the £313m spent in 2010. The information was obtained through a Freedom of Information request made by David Oliver, who used to be a Clinical Director at the Department of Health. Conservative MP Andrew Lansley, who was Health Secretary between 2010 and 2012, said that he was “staggered by the scale of the expenditure on management consultants” and pledged to cut “management” costs by 46% by 2014. Clearly the opposite has happened.

£640m is enough to employ an additional 2,000 nurses or cover the total yearly costs to run approximately three hospitals. Mr Oliver, whose findings were published in the BMJ on the 10th of this month, likened the management consultants to “arms dealers” and “racketeers” during war, implying that these consulting firms were using the chaotic times within the NHS to create large profits for themselves. This has inevitably led to a number of questions being raised about the role of these consultants, such as whether they are actually helping the situation at all, and how accountable they are. Mr Oliver says that the firms “are unaccountable and can walk away from bad or damaging advice with no consequences.”

Who is to blame?

The NHS – There is a strong argument to say that the NHS should accept a significant portion of the blame for this situation, as they are agreeing to employ these management consultants, some of whom are paid £4,000 per day. It is unclear thus far how the NHS has benefitted from any of this spending. This seems to be yet another area within the NHS where there is a lack of accountability. Additionally, this brings the effectiveness of leadership from within the NHS into question. As Mr Oliver put it, “If these well paid individuals lack the skills to solve most local problems in-house, or by learning from other NHS colleagues, perhaps they shouldn’t be leading at all.”

The Government – Some are also trying to place blame on the Government for the confusing way in which it is trying to restructure the NHS and “cut costs”, leaving many departments unsure about their roles in the newly structured NHS, and have therefore turned to outside help in the form of management consultants. It’s also very clear that the Government have been completely unsuccessful in any attempts to cut the amount of money spent on these services.   

The Consulting Firms – Mr Oliver was quick to criticise the consultancy firms involved, particularly in terms of the fees that they charged and how qualified some of their consultants were to dispense advice to the NHS. As private businesses, it is inevitable that the consulting firms will do everything that they possibly can to extract money from the NHS. Among one of the more extreme examples of spending that was highlighted by Mr Oliver was the £2.7m Barts and the Royal London hospitals are currently spending on a strategic review with McKinsey.

In the past Mr Oliver says that he has been offered “obscene amounts” to consult for the NHS, but offers “go quiet” when he says that he will advise for free. With NHS resources stretched to breaking point over the Christmas period, it’s very hard to say that £640m was money well spent.