Manchester Mayor criticised for £250,000 consulting spend

19 March 2019

The Mayor of Greater Manchester has been criticised for splurging hundreds of thousands of pounds on consulting fees before determining that the region’s fire brigade must slash its budget by millions. Andy Burnham put more than £250,000 towards work from ten consulting firms as part of a review into the region’s emergency services.

Despite the continued argument that projects like the Northern Powerhouse initiative are helping to address the North-South divide in the UK, statistics still show that the North has borne the brunt of austerity in England. Northern English cities have been disproportionately affected, with their spending cut on average by a fifth since 2010, while cities in the south and east of England had average losses of 9%.

The impact of spending cuts has been keenly felt in Greater Manchester in particular, where local government spending has fallen by as much as £650 per person since 2009 in some parts of the region. As the area looks to find further savings, while the Central Government continues to fail to deliver on its pledge to end austerity, it has been announced that the fire brigade for Greater Manchester faces a reduction of up to £10 million from its budget.

The swingeing cuts to hit the emergency service would likely see its fleet of fire engines reduced from 56 to 47, while six fire stations face closure, and 113 support staff could suffer the axe. The news follows an investigation from Mayor Andy Burnham, which was triggered in part by the admission of Chief Fire Officer, Jim Wallace, that since 2015 the service has failed to deliver “its own efficiency plan”.

Greater Manchester Mayor Andy Burnham spent £268,300 to review the city’s fire service

The review itself has been far from inexpensive, however, and it has led some to accuse Burnham of hypocrisy. During the review of the fire service, which has delivered demands for the service to find major efficiency savings, the Greater Manchester Mayor reportedly splurged £268,300 in public funds on consulting work for his root-and-branch review.

According to local newspaper Manchester Evening News, Burnham tasked ten different consultancies with helping to compile the review, receiving payments ranging from £101,000 to £7,000. The largest amount was handed to Leicester headquartered P. Cooper & Associates for the expertise of a “senior change and transformation programme specialist,” while it was reported that another of the consultants gave “guidance on leadership and culture”.

A Greater Manchester Fire and Rescue Service (GMFRS) spokesman said of the spending: “The Programme for Change programme has required input from specialists who are expert in areas such as organisational transformation, operating models for fire safety and estates.”

Manchester’s fire brigade was criticised in 2017 when, in the wake of the Manchester Arena bombing, a report by Lord Kerslake noted crews had been held back from helping. Contrary to helping deliver a more efficient service, Unison has told the press that it believes the proposed cuts will make the residents of Greater Manchester “less safe”. With the expenditure of the review on private sector consultants now public, meanwhile, the union has slammed the report for throwing away public funds while jeopardising vital public sector work.

Unison represents the 113 staff who may lose their jobs, and a spokesperson for the union told Manchester Evening News, "It's disappointing that when finances are clearly tight, priority has been given to hiring external consultants rather than engaging with the workforce. This will be a shock to our members who were only told on Monday their jobs were at risk."

In recent years, a succession of local authorities have come under fire from officials and the general public for their consulting spending in the UK. Earlier in 2019, a freedom of information request by The Times revealed that local councils across the UK have spent around £400 million on consulting firms in the last year alone. According to the report, this represents a rise of more than a fifth since 2014, with critics using the figures to call into question the value added by engaging external expertise.

Commenting on the criticism many councils face, Tamzen Isacsson Chief Executive, Management Consultancies Association, said, “Consultants play a vital role in the public sector, [providing] transformational impacts, innovation and increased efficiency… Vital front line services continue to operate uninterrupted [while] consultants often help local authorities get better results with less money. As the MCA awards this year demonstrate consultants are delivering social benefits across the UK – from work on getting better outcomes for children in care to finding better processes for finding homes for vulnerable families in London these examples offer a true reflection of the consulting excellence that operates across the UK to the benefit of councils and the wider society.”

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Irish hospitals spent €700,000 on consultancy reviews

15 February 2019

A report in the Irish press has stated that Irish health officials spent roughly €700,000 on private consultants since 2016. The news comes as the latest chapter in a succession of stories which have seen public spending on consulting work come under scrutiny.

The Irish management consulting market is worth around €700 million, roughly one-tenth the size of the UK consulting industry. Growth has been strong in recent years, ranging between 6% and 11%. The Irish consulting sector is different from the UK and other mature markets in that while they constitute considerable chunks of consulting spending, financial services (21%) and consumer and industrial products consulting (22%) make up smaller segments of the sector than the public sector, which represents a quarter of Irish management consulting turnover.

A sizeable portion of this is spending from the health sector. In line with leading economies all over the world, Ireland is experiencing key demographic changes relating to an ageing population, while strained public services are unable to expand their headcount and facilities due to a decade of austerity inflicted by governments following the Great Recession. As a result, healthcare providers are increasingly turning to the consulting sector to find efficiency savings and areas where cost cutting can be implemented least painfully.

The Irish Government has come under sustained criticism for its outsourcing practices in recent times. Having racked up a €12 million bill on contracts to external consultants in 2016, with just three departments accounting for most of the expenditure – €704,304 of which was spent by the Department of Health – the Government has since attempted to paint itself as watching its waistline when it comes to consulting spending. However, the issue has once again become a matter of intense scrutiny, after it emerged that Irish hospitals have scarcely reduced their consulting spend, several years later.Spending of Irish Government and National Children's Hospital on consulting services

According to documents reported on by the Irish Examiner, Government and officials from the National Children's Hospital have spent almost €700,000 on internal and external consultancy reviews into the project’s governance and financial controls project in the past two years. Since February 2017, Government and national paediatric hospital development board officials commissioned some 12 separate inquiries and reviews into the multi-billion euro project.

The National Children’s Hospital is a working title for an as-yet-unnamed children's hospital currently under construction on the campus of St James's Hospital in Dublin, Ireland, as a regional secondary and national tertiary centre. Once complete in 2022, the new hospital and associated Children’s Research and Innovation Centre is touted by project management firm BDP to become a “world class facility for children and young people from all over Ireland” who have complicated and serious illnesses and are in need of specialist and complex care.

Highest earners

The scale of the review costs to date has been outlined in files provided by the Department of Health to the Dáil's public accounts committee in response to unanswered questions at a day-long meeting earlier in the year. According to the documents, an on-going review into the cost of the project itself by PwC is expected to come with the largest price tag of the bunch, at €450,000. Meanwhile, 11 other reviews in the past two years have increased the strain put on the public purse by more than €200,000.

The next largest figure saw an independent review by DSSR cost €80,000 in October 2018. A bench-marking review two months later cost a further €39,500 paid to Aecom. Contracts for an internal audit report and a review of "business continuity and disaster recovery" meanwhile saw Mazars paid a total of €31,718.

Two audits in 2016 and 2017 cost a total of €36,000 paid to C&AG, while a review of the code of governance manual in May 2018 and a corporate governance review in July 2017 saw Eversheds paid €8,800.  Finally, two contracts for a management review and a stakeholder review saw Deloitte receive a combined fee of €7,448.

“It raises the question, what are officials at the Departments of Health and Department of Public Expenditure and Reform actually doing?… Officials need to explain the full extent of their knowledge of the escalating cost, and how information was escalated at the department.”
– Jonathan O'Brien, Sinn Féin TD

Of the four internal audits, six independent reports, and a further internal report, two were pro-bono procedures. An inflation overview of the Irish construction industry in October 2018 by Linesight cost nothing, as did a "process to guaranteed maximum price" internal review, by National Children’s Hospital’s Internal Report team in November 2018.

The spending has sparked criticism from members of the Oireachtas, Ireland’s national parliament. Speaking to the Irish Examiner, PAC member and Sinn Féin TD Jonathan O'Brien said that the spending on private consultants for reports and reviews was “testament to the incompetence at the heart" of the National Children’s Hospital project.

O’Brien added, "It raises the question, what are officials at the Departments of Health and Department of Public Expenditure and Reform actually doing? Minister [for Finance] Paschal Donohoe has stated that he only became aware of the cost overruns in November of 2018. The Minister, his department and officials need to explain the full extent of their knowledge of the escalating cost, and how information was escalated at the department.”

In the UK, consulting spending by health officials has also come under scrutiny. In 2018, a study revealed that National Health Service (NHS) trusts which hire management consultants in order to reduce expenditure do not end up saving money. The research suggested that rather than finding efficiency savings, under-resourced hospitals actually end up spending more in the long run.