The Observer 21 July 2018
A large NHS body has spent millions of pounds on management consultants for a plan designed to save money – but which could cost more than £1bn to put into practice.
Over the past six years, the North West London Clinical Commissioning Groups has spent £66m on 41 different management consulting firms – including the big four: McKinsey, EY, Deloitte and PwC – for a five-year programme to improve healthcare in the area while closing a £1.4bn budget gap forecast by 2021. However, costs have ballooned and the trust said it now needs £1.3bn to implement the programme. It declined to quantify the savings that have been made to date.
It is just one example of the huge sums being spent on management consultants across the health service, despite growing concerns that they do not deliver value for money. Research from the University of Bristol and Warwick Business School suggested higher spending on management consultants made hospital trusts less, rather than more, efficient.
Stephen Cowan, the leader of Hammersmith & Fulham council, said the £66m spent by the NHS in north-west London was “a complete waste of money, evidenced by the fact that they couldn’t produce a business plan”.
One doctor working at Ealing hospital said staff felt completely demoralised by the changes taking place: “First they took cancer care, then they took obstetrics, then they took children’s in-patient services. There is a feeling of planned demolition.”
Management consultants drafted and redrafted the investment case for the trust’s transformation plan, which is now being revised after the regulator said assumptions about reductions in demand for certain services were “counterfactual”. Colin Standfield, a campaigner with Ealing Save our NHS, said: “That is exactly what we said six years ago. We said the numbers don’t work.”
It is a common complaint about management consultants working in the health service. Roger Steer, a former NHS chief executive who reviews NHS plans for local authorities, said: “It’s wishful thinking. You balance the books by assuming that demand can be reduced, then cuts can be justified by the fact that the service won’t be needed in the future.”
He said management consultants were often brought in to give plans a “plausible gloss”. A report by The King’s Fund, a healthcare thinktank, suggested the current wave of plans had “created an industry for management consultants”.
In north-west London, plans continue to be implemented despite the delay in approving the investment case. The first step was to close acute A&E departments at Central Middlesex and Hammersmith hospitals, replacing them with urgent care centres to deal with minor illnesses and injuries. That had a major impact on A&E waiting times in north-west London, which have been consistently worse than the rest of the country ever since.
A spokesperson for North West London Clinical Commissioning Groups said: “Investment in the right expertise has allowed us to redesign services and make real improvements to the care we provide our 2 million residents. Over the last three years we have significantly reduced our spend on consultancy.”
Peter Spilsbury, director of the Strategy Unit, an internal NHS consultancy, said individual trusts are also not sharing informationabout projects, so management consultants can resell their work to different parts of the health service.
He contrasted that with the work of the Strategy Unit. “The knowledge developed stays in the NHS. When we produce knowledge, we publish it whenever we can. If we’ve done a piece of work for one NHS client, we don’t sell it again.”
The lack of transparency has a further impact on staff morale. The doctor at Ealing hospital said: “Everybody feels things are done behind their back with ulterior motives, in a confrontational rather than cooperative way.
“Clearly we are in terrible trouble. When we look back at this period of austerity, I think we are going to see this in the statistics of the healthcare indicators. I’m sure that it will show up.”