Annual NHS spend on management consultancy has doubled since 2010

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Annual NHS spending on management consultancy has doubled from £313m to £640m between 2010 and 2014, despite a promise by Health Secretary Andrew Lansley to “slash” spending after the 2010 election, reveals an article in The BMJ this week.

This is enough to run three medium sized hospitals or employ about 2,000 extra nurses, says David Oliver, a former clinical director at the Department of Health, who obtained the figures through a Freedom of Information request.

“In times of war, arms dealers, rebuilders, and racketeers profit from the chaos,” he writes. “Disruptive innovation” has led to similar spoils for management consultants, with taxpayers’ money diverted from already struggling health and care services.

The health sector regulator Monitor, meanwhile, has placed contracts worth about £32m with the “big four” management consultancy companies, though its work was done with a fraction of such spending before the election, explains Oliver. It also often helps install “interim” executives on eye watering daily rates.

Senior partners charge £3,000-£4,000 a day - the amount that a senior doctor earns in two weeks, he says.

Meanwhile, Oliver points to a “constantly revolving” door between the Department of Health, NHS England, Monitor, 10 Downing Street, and the consultancy firms, “creating commercial advantage.” He also points out that consultancy firms “are unaccountable and can walk away from bad or damaging advice with no consequences.”

With about a million staff and 10% of gross domestic product, the NHS has experienced clinical and organisational leaders, writes Oliver. “If these well paid individuals lack the skills to solve most local problems in-house, or by learning from other NHS colleagues, perhaps they shouldn’t be leading at all.”

“Let’s ensure that all consultancy is subject to a rigorous audit of value and impact and whether it needed to be contracted out at all,” he concludes. “It’s time for management consultants to face the same transparency and accountability as the rest of us.”