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Taking the biscuit: the consultancy companies chewing up NHS resources

The Doctor 
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An investigation by The Doctor reveals that millions are being spent on private consultancy firms and creating new management jobs – to support a quiet reorganisation of the health service which lacks transparency or legislative backing. Peter Blackburn reports

Private consultancy firms have been handed at least £26m from NHS budgets as part of plans to reorganise the health service – and a swathe of hundreds of new managerial and administrative posts have been created to drive the changes forward, an investigation by The Doctor reveals.

Some of the world’s biggest consultancy companies, firms such as KPMG, Deloitte, PwC and Ernst and Young, have been tasked with projects looking at ‘reviewing demand and capacity’ and ‘supporting sustainability’ – with several of the bills sent to NHS chiefs running into seven figures.

The health service’s reliance on consultancy, revealed by the responses to a series of FoI (Freedom of Information) requests sent to STPs (sustainability and transformation partnerships) and ICSs (integrated care systems) across the country by The Doctor, also includes a number of smaller firms often led by former NHS leaders who chose to leave or were made redundant during previous, costly, reorganisations.

It comes as NHS England chief executive Simon Stevens has urged local areas to push on with progress toward integrated care, which aims for local health leaders to take control of the entire care needs of their population and the budget for doing so – supposedly reducing the role of competition and market forces and attempting to cut duplication of services.

The figures collated by The Doctor, made up of new data from 30 of 44 areas and previous data from a further nine, have raised concerns about the NHS’s long-term workforce planning, retention of staff, and short-term haemorrhaging of much-needed money away from frontline care. The true costs are likely to be even bigger, owing to some STP or ICS footprints either failing to update previously supplied figures, or not providing any information at all.

The Doctor
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BMA council chair Chaand Nagpaul says the findings would be ‘galling’ for doctors across the country struggling to provide high-quality patient care while having services cut from around them.

The north London GP adds: ‘Given the parlous state of NHS finances and patients suffering delays for essential services it is utterly unacceptable to see so much money flowing away from patient care to private consultancy firms – particularly when the staff carrying out the work have often been on the NHS payroll and could have been working on these transformation projects from within the health service, rather than, much more expensively, from the outside.’

 

Influx of new managers

It is not just on consultancy firms where the fledgling STPs or ICSs are forking out millions of pounds either – The Doctor’s research shows more than 500 jobs have been created across the country, with either new staff brought in or existing NHS employees seconded, with an annual salary bill of around £31m.

The figures reveal an expensive new cadre of senior staff being formed with 302 of the jobs created valued at NHS Agenda for Change bands eight or above – attracting annual salaries from £42,000 to £142,500, or even more at national discretion for ‘very senior managers’ of which there are at least 54.

Dr Nagpaul says: ‘Management staff are, of course, crucial to the NHS – without good management we cannot do our jobs to the best of our ability but there appears a lack of accountability with what can appear a profligate relationship with outsourced tiers of management.’

'Money flowing away from patient care to private consultancy firms'

For many frontline staff – so used to seeing a lack of investment in workforce, equipment and buildings in their workplaces – it will be the money flowing to private consultancy firms which will be most difficult to accept.

Eleven of the 44 original STP footprint areas admitted to spending more than £500,000 on private firms in figures released to The Doctor and two areas, Kent and Medway and South East London, spent more than £12m combined. Only five areas say they hadn’t turned to consultancies for help.

NHS business has proved to be a rich area for the biggest firms throughout recent years and the STP process has been no different, the investigation reveals. KPMG, PwC, Deloitte and Ernst and Young all benefited from deals in the hundreds of thousands of pounds.

A senior employee at one of the world’s top-10 global consultancy firms (ranked by revenue) told The Doctor the NHS provides huge business for his colleagues.

He adds: ‘The health service is guilty of losing, or paying-off, its best managerial talent only to often realise their services are again needed at a later date. The reality is that short-term fixes along the line will cost a lot more money.’

Newcastle University health policy and management professor David Hunter agrees. He says: ‘Each time there is a major change initiative in the NHS people in the system look to external help either because there’s a lack of in-house capacity or because strong links are retained between those in post and those who may have left… then sell their services back to the NHS.’

One consultancy company, Carnall Farrar, which is run by former NHS London chief executive Dame Ruth Carnall, was paid £6.2m by health leaders in Kent for ‘strategy, analytics and modelling’ – just a few years after its chair Dame Ruth and company partner and chief executive Hannah Farrar left the NHS. Carnall Farrar also invoiced Hertfordshire and West Essex £315,250 for ‘development’ of the area’s ICS.

Carnall Farrar did not respond when asked about the value for money their services gave the NHS.

 

‘No buy-in’

Maidstone and Tunbridge Wells NHS Trust consultant rheumatologist Mike Batley says the vast expense from the Kent and Medway STP comes at a time when local services are being reviewed and doctors involved feel they are being asked to choose ‘which finger to break’ when looking at where money could be saved.

‘There’s no buy-in to this plan and there’s not been a huge amount of clinical involvement in the STP,’ he adds.

‘I don’t mind money being spent on private firms, if it achieves something, but the history of the NHS is that you get huge reams of paper, most of which are blank or useless to us, and keep employing people to do the same things over and over again.’

Several other areas of the country spent money contracting firms who employ specialists who previously worked for the NHS. As well as forking out £1m to Deloitte for a review of hospital services, South Yorkshire and Bassetlaw commissioned a consultancy called Attain for ‘ICS support’ at a cost of £827,000. Among the senior leaders at the firm is director Chris Walker whose previous job was in the NHS as director of programmes for the Yorkshire and Humber Commercial Support Unit and director Chris Spark who worked in NHS supply and procurement roles for more than seven years before moving to Attain. Attain did not respond to request for comment from The Doctor.

And in north-west London more than £400,000 was given to PA Consulting, a firm which says it believes in ‘the power of ingenuity to build a positive human future in a technology-driven world’. The firm’s head of healthcare consultancy Jonathan Pearson was an NHS management trainee and is independent chair of the Sandwell and Western Birmingham health system seconded from PA Consulting one day a week.

The Doctor
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A spokesperson for PA Consulting told The Doctor the firm was ‘proud’ of its work with the NHS and the value for money provided, suggesting such ‘specialist support’ was ‘not available’ in-house.

Health leaders in south-east London, one of five STPs covering the city, were the second-biggest users of external consultancy, revealed by the study, after Kent and Medway – forking out more than £4m, with PwC collecting more than £3m and Ernst and Young benefiting to the tune of more than £800,000. The STP’s response to The Doctor says the amounts paid to PwC cover ‘general advice and support’, particularly regarding ‘strategy development, programme support and financial and activity modelling’. Neither firm, nor the STP, responded to a request for further comment.

Lewisham GP Louise Irvine says the contracts are an unacceptable use of funding in a local health system which has been cut to the bone.

‘I’m shocked to hear they are spending so much money,’ Dr Irvine says.

‘Here in Lewisham we are seeing major cuts to mental health services, school nursing and district nursing. We’ve had public health cuts like weight management, breastfeeding support and smoking-cessation services totalling millions of pounds. This affects my daily work – we have no one to signpost people to any more.

‘To hear this money is available to spend on this kind of thing and taken away from vital frontline care seems profoundly immoral.’

 

Lack of legislation

The investigation also raises important questions about the legitimacy of the quiet reorganisation of integrated care, which appears to be moving forward at pace, but is not backed by any Parliamentary legislation or statute and, as such, STP or ICS organisations have none of the legal duties of transparency of other NHS organisations.

The BMA has repeatedly called for proper clinical and public engagement for the process – as well as for any reorganisations of the health service to be backed by primary legislation and the removal of competition and the internal market. Despite these concerns the revolution appears to be grinding on at pace.

University of Manchester professor of health policy and management Kieran Walshe says: ‘[Lack of governance] remains a real area of weakness – they are not statutory bodies and don’t have to have a named officer dealing with FoIs for example.

‘That is a concern about the accountability and governance and the fact that STPs unlike NHS trusts don’t have any rules about governance arrangements. It’s things such as meeting in public and publishing papers and annual reports. It doesn’t exist for STPs and that matters.’

Professor Walshe says national direction would be needed soon but that the mistakes of the past – reorganisations being too heavily dictated from the top – should be learned and rules and legislation should still be ‘loose’ to allow variation and local solutions to local problems.

Dr Nagpaul says: ‘New structures should be backed by statute, have proper transparency and should only be formed when proper, genuine clinical engagement has taken place.’

'New structures should only be formed when proper, genuine clinical engagement has taken place'

The job creation linked to these new structures is striking for two reasons – its quantity and the pace of progress. In June 2017 when the BMA first revealed the jobs being created to drive the process, the figure was just 150. Eighteen months on, that figure is now 525.

The investigation reveals a major disparity in the processes being carried out across the country. In some areas, such as north-west London or Devon, health leaders say they are using existing job roles in clinical commissioning groups – but in others, such as Kent and Medway, Cambridgeshire and Peterborough and south-east London, whole project-management teams, with senior leaders, have been created and swathes of analysts, press officers, and programme directors appointed.

Perhaps unsurprisingly the biggest structural changes by far appear to be taking place in Greater Manchester, where NHS England has formally transferred a number of responsibilities for health and care to local leaders. Greater Manchester is not an STP or ICS but ‘a unique devolved area’, a spokesperson says.

The Doctor
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See the figures in full

Responding to The Doctor’s requests for information the devolved area’s spokespeople confirmed that around 291 staff now work on providing devolved health and care in the area. They say 104 (the number recorded in The Doctor’s research) of those staff were charged with delivering specific programmes related to transformation. The total salary bill for those staff is more than £6m, which a spokesperson confirmed was footed by NHS England.

Dr Nagpaul says the varying direction across the country was ‘worrying’.

He adds: The result of these plans will be more inconsistency, a deepened postcode lottery and, ultimately, doctors and patients will suffer.

As Dr Nagpaul says, the lack of shared direction in the process appears to have resulted in a degree of chaos and confusion, for local areas and for doctors and patients.

It may be that until national leaders provide direction, transparency and genuine statutory support for change – rather than a series of platitudes such as ‘blur the boundaries’ and ‘do first, ask permission later’ – clarity will be hard to come by. Over to you, Mr Stevens.

All figures for money and staff correct at the time of publication

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