NHS England hired consultancy to find out own responsibilities

02 August 2019 Consultancy.uk

The national commissioning body of healthcare in the UK reportedly hired a consulting firm for ‘function mapping exercise’ in 2018. Critics have decried the daily rate of £1,900 paid to PA Consulting for essentially defining what National Health Service (NHS) England was responsible for as a “shocking” waste of public money.

With the institution facing unprecedented demand from the challenges presented by an ageing population, while government spending on the health system remains limited, the NHS is at a cross-roads in its existence. According to its Five Year Forward View plan, the NHS acknowledges that changes are needed to adapt to this new environment, something which has buoyed demand for consulting firms in the organisation.

The involvement of private entities in the running of the UK’s hallowed health institution has not been welcomed by all quarters, however. After a decade of austerity, an ageing population is increasing the workload burdening the NHS’ depleted workforce, meaning any funds put toward consulting is often seen as taking vital funding away from front-line services which citizens have paid for through taxation. At the same time, a study from Bristol University found NHS trusts which hired consultants in order to reduce expenditure didn’t save money, but rather the under-resourced hospitals actually ended up spending more in the long-run.

NHS England hired consultancy to find out own responsibilities

With increasing scrutiny being applied as a dissatisfied electorate demands value-for-money from consultants contracted to help reduce costs and preserve key-stone services, the most financially troubled trusts have been required since 2015 to seek approval from NHS Improvement (NHSI), the institution’s financial regulator, for any consultancy contract worth more than £50,000. However, further complicating the matter, the NHSI too has come under mounting scrutiny for its own consulting spend.

Last year, the health service’s financial watchdog provoked public ire when it announced plans to spend £500,000 on private management consultants to help define its “purpose”, just two years after spending £630,000 on a similar consultancy project when it was set up. This saw the entity strike a deal worth ten times the amount it would normally have to approve for trusts.

Now, NHSI has been linked to a further furore involving consulting spending. This time, the matter relates to the proposed merger of NHSI with NHS England (NHSE), which will see the two entities align in an effort to streamline quality of care for the population and efficient usage of public money. According to reports circulated by the Health Service Journal, however, the merger is already leading to a large level of spending on consulting work.

Mapping exercise

An internal source from NHSE leaked an invoice to the healthcare news outlet, which apparently detailed rates charged by a team of seven professionals from PA Consulting, hired to ‘map’ NHSE’s responsibilities ahead of the merger with NHSI. One of the PA Consulting staff, Partner Tony Wood, was charged out at a daily rate of £1,900, or £5,700 for three days’ work.

This was not most expensive consultant, however, as James Raymond – who according to Health Service Journal has since joined NHSE as a senior policy lead – saw 35 days of work for NHSE billed at a daily rate of £1,510, earning PA Consulting a total of £52,850 in the process. All in all, the bill totalled £204,164.

The ‘function mapping exercise’ in the first three months of 2018 was defended by an NHSE spokesperson, who argued the contract was a vital part of its preparations for its upcoming merger with NHSI. They claimed that the measure would ultimately help save the taxpayer millions of pounds by reducing “the reporting burden on front-line NHS staff” as well as “leading to efficiency savings of nearly 20%” by apparently freeing up almost £100 million to be reinvested into patient care.

“Given the legal complexities of joining NHSE and NHSI detailed independent work was needed to help identify which functions needed to remain separate for legal reasons and which could be carried out by single teams on behalf of both organisations,” they added. According to the spokesperson, NHSE and commissioning support units had spent “only” £9 million on consultancy services in 2018-19 compared with £27 million in 2017-18. Under NHSE’s current financial instructions, non-clinical and non-pay revenue expenditure with non-NHS bodies only require its board to approve the business case when worth more than £10 million.

However, the source speaking to the Health Service Journal was less convinced of the value of PA Consulting’s work. The individual went as far as to tell the Journal it was a “shocking example of how the NHS is wasting taxpayers’ money on grossly overpaid management consultants.” They added that NHS “should have been able to undertake this work internally using existing staff,” something which would not have incurred additional costs to the taxpayer.


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