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NHS Improvement defends £500k consultancy contract after Labour backlash

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By lealegraien@cogora.com
13 March 2018

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NHS Improvement has defended its decision to spend half a million on consultancy services following criticism from the Labour party.

Commenting on the watchdog’s move, Labour shadow health secretary Jonathan Ashworth MP said that ‘the ballooning costs of consultancy fees are entirely unacceptable, especially at a time of profound pressure on NHS finances’.

He continued: ‘The scandalous findings recently that management consultants are in many cases making the NHS less efficient should have alarm bells ringing.’

NHS Improvement has defended its decision to spend half a million on consultancy services following criticism from the Labour party.

Commenting on the watchdog’s move, Labour shadow health secretary Jonathan Ashworth MP said that ‘the ballooning costs of consultancy fees are entirely unacceptable, especially at a time of profound pressure on NHS finances’.

He continued: ‘The scandalous findings recently that management consultants are in many cases making the NHS less efficient should have alarm bells ringing.’

An NHS Improvement spokesperson told Healthcare Leader that McKinsey & Company was hired through the Crown Commercial Service to ‘look at and challenge its operating model’ and how they interact with Trusts to ensure they’re supporting them ‘in the best way possible’.

‘Challenging operating model’

NHS Improvement argued that ‘the way NHS Improvement operates has to change to support trusts to meet the challenge of delivering services as efficiently as possible at the same time as meeting the growing demand from an ageing population’.

It added: ‘As a learning organisation, we are also well aware that there are things we could do better.’

Latest NHS Improvement performance report showed that consultancy spend by Trusts cost £189m over nine months in 2017 compared to the planned £122m for 2017/18.

The report read that the £67m increase was offset by ‘underspending on general supplies and services of £185m and other non-operating items of £69m.’

‘Fail to improve efficiency’

Recent research by the University of Bristol found that management consultants ‘fail to improve efficiency in the NHS’, making the situation ‘worse’ in some cases.

It said that this ‘may be due to consultants' lack of knowledge of how the NHS works or the failure of managers to manage consultants or follow up on the advice they receive’.

Each trust spends on average £1.2m on consultants each year. Overall, annual spend on the service amounted to £640m in 2014, figure that has more than doubled since 2010, according to the researchers.

Co-author of the study Professor Ian Kirkpatrick from Warwick Business School said that given financial constraints facing the NHS, ‘an obvious question is whether it is appropriate to continue using external consulting advice at the current level’.

He added: ‘This study highlights the need for organisations to be more circumspect in decisions about whether and how to use management consultants.’

 

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