The government is to start centrally monitoring the NHS’s expenditure on management consultants from next year.
Earlier this year, the health select committee strongly criticised the government for having little idea of how much the NHS spends on management consultants.
It’s estimated that that management consultants are charging up to £1,000 a day for advice and cost the NHS as much as £600 million in 2005/06.
The government last week conceded that it should collate overall expenditure on management consultancy but warned: “at present, the level of reporting is neither consistent nor complete across organisations. It is therefore the Department of Health’s intention to issue guidance to NHS organisations as part of the financial reporting manual for 2009/10 to bring consistency to this reporting.”
The government will not, however, monitor the day rates that management consultants charge as requested. “It is preferred practice to negotiate costs for a whole piece of work rather than agreeing individual day rates. This process provides protection from the financial risks being exposed if day rate based contracting is used. This makes provision of day rates impossible to provide,” it explained.
The health select committee also recommended that a sample of contracts with management consultants be subject to external peer review. This should include an assessment of the value of consultants’ output.
The government said responsibility for assessing value should rest with trusts and they should draw on the expertise of their non-executive board members.
“Nevertheless, as part the government’s ongoing drive to improve the transparency of NHS expenditure, it will examine steps organisation should be taking to understand the value that is being achieved through the expenditure on management consultancy,” it said.
A BMA spokesperson commented: “It’s good that we’re going to get a clearer idea of the sums being spent on management consultants. Recent estimates indicate that it’s £350 million a year by trusts in England, and around £150million by the DoH. That’s a huge amount of money to be spending on outside opinions at a time when front-line services are being targeted for funding cuts.
“This may be money well spent if it is delivering genuine improvements to the way hospitals operate, but as most doctors will tell you, some of the best ideas are coming from within the NHS, not from the private sector.”
Alan Leaman, chief executive of the Management Consultancies Association, commented: “Management consultants are providing a wide variety of benefits to the NHS, helping to improve patient care and reduce costs for the taxpayer.
“Besides some strategic and practical advice, this is most often about helping to find good solutions to problems and then getting them implemented. We support moves to greater transparency.”
Read a blog on management consultants.
Eureka! I now realise where we ‘consultants’ (clinical not management) have been going wrong all these years. We have been GIVING our advice to management; maybe if we had been charging £1000 per day they would have taken a bit more notice! It is quite incredible - indeed a scandal - that those in ‘management’ (local or national) refuse to listen to those ‘on the front line’ (who know what is happening and what the problems are) when they offer solutions to problems. But they will pay expensive management ‘consultants’ huge sums to give them the same advice! So much for ‘good governace’, efficiency and ‘cost-effectiveness’! When will they have an audit of management techniques? Retired Orthopod.
£1000 a day for stating the flippin obvious or some other sort of vacuous comment. Often these ‘consultant teams’ bugger off after a week, leaving a trail of flip charts and powerpoint presentations (that just waste space in my inbox) and leave the frontline to cope-with less resource.
Clearly I’m in the wrong job-I plan to trade in my MB BS/BSc/FRCP for 100 Btecs (courses available on: managment/flower arranging/chair arranging on the titanic) and set up as a proper consultant (plc)!
Spot the typo-’management’ not ‘managment’-I ll get a spelling course too!