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November 2018
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Management Consulting In The NHS

The National Health Service has enjoyed an unprecedented increase in real funding over the last ten years. But the fallout from the banking crisis, recession and subsequent public sector debt suggests a far bleaker outlook.

The debate over NHS resources and funding has been bubbling away for some time, assisted by excellent work by the King’s Fund and Institute for Fiscal Studies. A number of organisations have criticised the NHS’s use of external consultants. The British Medical Association and Royal College of Nursing in particular have both criticised the public money spent on management consultants. Dr Peter Carter of the RCN called it -utterly shocking.

The Commons Health Select Committee recently reported on management consultants and the NHS, and recommended that the government publish a central list of the consultancies contracted by the NHS and the projects that they have worked on.

The Management Consultancies Association supports greater transparency for taxpayers and has endorsed this proposal. We are working with the Department of Health on a concordat setting out the responsibilities of both buyers and suppliers of consulting.

To help understanding of the role of consultancies, the MCA has also recently produced a report into the use of management consultants by the NHS. Improving care, reducing cost looks at what work is done by management consultants, the value it adds and how this fits in with a future NHS which delivers high quality care without stretching public finances beyond breaking point.

The NHS has a budget of over £100bn and our figures show that of this, £300m was spent on management consultants in 2008 – less than 0.3% of the total budget. This equates to £200 per NHS employee – a typical large private sector organisation spends ten times more per employee on consulting.

Commentators frequently misunderstand the role of consultants, arguing that money spent on consultants could be better spent on frontline services. Our data shows that two thirds of consultancy spend is associated with large scale programmes, including project management, process re-engineering, IT consulting and change management. This spending could indeed be redirected, but only if these projects – which are often core to improving patient care – were stopped.

The other third of consultancy spend is used for assistance with day to day operations of the NHS. Consultants provide strategic advice to Trusts and other health organisations and help to deal with and implement changing government policies. As Steve Barnett, chief executive of the NHS Confederation has commented: -A number of major policies have been implemented in recent years to increase the effective running of the health service where it has been necessary for NHS organisations to procure outside expertise. The NHS is a large and complex organisation which requires management and planning like any other. Responding to major national policy changes often requires local planning and external advice and in many cases the use of this kind of expertise can help to drive down costs in the long-term.

Other projects are geared to improving productivity and identifying and managing outsourcing opportunities. For example, MCA member Atos Consulting recently worked with NHS South Central to increase efficiencies in patient services. This project resulted in an average decrease in patient waiting times of 14 weeks, in some cases by 25 weeks.

A key quality that consultants bring to the NHS is specialist knowledge of other organisations and sectors. This wider understanding can often result in innovative ideas and solutions being used by the NHS. Further, consultants’ position as outsiders allows them to take a long term view and offer objective advice, independent of internal politics.

Consultants are also able to bridge the gap between clinicians and administrators/managers – they always need to work together effectively if the NHS is to provide a world class service at an affordable price to the taxpayer.

Of course, the use of consultants by the NHS can be improved. For example, the different roles of interim managers and consultants could be better defined. And, where full time employees can be recruited cost effectively this should be done rather than hiring consultants. Project outcomes could be made clearer by the NHS and consultants rather than the focus lying on the inputs. We are already seeing a trend in the private sector of greater sharing of risk between consultants and clients and we expect more performance related contracts between the NHS and consultancies to emerge.

There is no shortage of good ideas for improving productivity and patient care in the NHS; but it will often take strong partnerships between the NHS and management consultants to ensure that they are delivered. Taxpayers rightly demand high-quality services and value for money. Those who attack the role of management consultants are undermining efforts to increase efficiency and improve patient care.

Case Study – The Berkeley Partnership: Making Polyclinics a Reality'”

Polyclinics are a good example of an initiative the NHS is pursuing to transform its services. By changing the way services are delivered and moving some out of an acute setting, we should end up with higher quality care delivered at a more affordable price. But completing the transition and realising the benefits will require five years of sustained project management because so many interconnected processes have to change and so many people, including the public, have to be won over. The Berkeley Partnership been working with two of the early implementer PCTs in London to establish their first polyclinics and plan the full transition journey.

Alan Leaman is Chief Executive of the Management Consultancies Association (MCA), whose NHS report, Improving Care: Reducing Cost is available at: www.mca.org.uk/reports/insight/improving-care-reducing-cost

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