NHS spends more than £300m on consultancy services

By Clare Murphy
Health reporter, BBC News

  • Published
Computer keyboard
Image caption,
IT, project management and human resources were included in the consultancy bill

NHS trusts in England spent more than £300m on external consultancy services last year, figures show.

The money was used to pay for advice on a range of issues, from legal contracts to human resources and media work.

The NHS Confederation, which represents trusts, says taxpayers' money should not be wasted but that outside help was often needed to deliver reform.

The figure represents less than half of 1% of the NHS budget but the health secretary described it as "staggering".

Overall, primary care trusts (PCTs) and strategic health authorities (SHAs) spent £313.9m on consultancy services in the financial year 2009/2010.

Pounds and pence

London areas spent nearly three times more per head on consultancy services than any other part of the country.

Camden PCT spent more than £12m, in excess of £50 per head of the local population, although they stressed much of this was down to a large spend on a body providing support to help achieve value for money and efficiency in commissioning services.

In contrast, Bournemouth and Poole PCT spent just 20p per head.

The government's health White Paper, released last month, includes measures to abolish SHAs and PCTs and replace them with GP-led consortiums.

Health Secretary Andrew Lansley said he was "staggered by the scale of the expenditure", adding that he had asked PCTs and SHAs to reduce their management costs by 46% over the next four years.

"This will root out unnecessary bureaucracy and any expensive duplication of functions," he said. "Every penny saved will be re-invested in improving patient care, meeting demand and driving up quality."

Nigel Edwards, acting chief executive of the NHS Confederation, said: "Any spending of taxpayers' money has to be justified, and the NHS has been asked by successive governments to perform tasks for which internal expertise was not present or needed to be developed. Dismissing all this spending as wasteful is unfounded."

He added that the proposed overhaul would likely increase the need for consultants' services.

"External advice will be necessary if NHS organisations are to deliver change and, with the financial challenges and size of the current reform programme, it is probable NHS organisations, especially new GP consortia, will require external help to deliver what the government wants," he said.

Mr Edwards also told BBC Radio 4's Today programme there were advantages to bringing in management consultants.

"They do bring ranges of skills and knowledge that you don't necessarily have in-house or you don't want to employ full-time because you don't need it all the time. To dismiss this all as waste is probably a major exaggeration."

He did concede that there was "probably not" the need to buy in "so much help".

"To some extent, the buying in that's happened over the last couple of years was directly in response to initiatives launched by the government which caused a peak in demand for management," he added.

'Value for money'

But the Royal College of Nursing described the figures as "shocking and nothing short of a scandal".

"It is extremely difficult to see how spending more than £313m on consultancy services in one year can be justified. There are currently more managers within the NHS than at any point in its history, so why are SHAs and PCTs buying in additional expertise?" said its chief executive Dr Peter Carter.

"At a time when nurses and other staff are seeing front line services cut and being asked to accept a pay freeze, these organisations need to clearly demonstrate they are getting good value for money from the taxpayer's health pounds."

Shadow health secretary Andy Burnham said: "We were already acting to bring consultancy spend down by one-third but Mr Lansley's reforms will give consultancy firms a field day.

"What he seems not to understand is the NHS needs good managers. By wiping away the expertise currently in primary care trusts, he is opening the door to consultancy firms who know that hundreds of new, untested GP groups won't have the experience to go it alone."

This is the first time the figures have been collected in this way. Estimates published by the Conservatives in 2006 suggested trusts had spent £172m on external advice that year.

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