Ministers and NHS management are becoming increasingly dependent on costly private sector management consultants to do the work that managers and civil servants were previously trained and expected to do as part of their jobs.
The pandemic – and NHS England’s insistence on driving through the simultaneous reorganisation into “Integrated Care Systems,” bringing fresh dependency on private companies specialising in apps, data and ‘population health management’ – has brought about a massive further growth in the numbers of consultants involved.
New research indicates that the NHS itself spent over £300m on consultancy in 2018/19, despite evidence that management consultants in health care “do more harm than good.” Indeed the evidence is that once consultants have been brought in they “keep getting rehired” – despite their failure to improve the efficiency or quality of services.
Test and trace
In the pandemic the current government has turned first and often to consultants for systems that could much better have been run through local government and the NHS. Last August consultancy.uk reported that 16 consulting firms had been awarded coronavirus contracts with £56m. But this was the tip of the iceberg.
January Health Minister Helen Whately admitted that 2,300 management consultants from 73 different companies (more than the civil servants in the Treasury) were currently working on the lamentable Test and Trace system, with £375m spent on consultancy for this project alone.
Other reports revealed that the consultants were being paid an average of £1,000 per day, and that Deloitte alone had 900 employees at work in test and trace. The Daily Mail estimated the total of consultants and contractors at 2,959. Sky News revealed last October that a 5-person team from Boston Consulting had been paid £25,000 per day helping to “mastermind the creation of the contract tracing systems.”
Last autumn, with Test and Trace “barely functional” in the face of a resurgence of the pandemic, reports indicated that hundreds of consultants from KPMG, EY and other firms were being lined up to reinforce the numbers who were already failing so badly. According to The Guardian, the additional consultants were required in areas including programme management, data, project support and supply chain – which might have been expected to already be in place.
Consultancy firms have played a key – and lucrative – role in most of the big reorganisations of the NHS going back at least to 1974. In recent years, a major McKinsey report commissioned by New Labour shaped many of the cost-cutting policies of NHS trusts and commissioners which aimed to generate £20bn of “savings” after the 2008 banking crash: and the incoming Tory-led coalition from 2010 employed McKinsey to help construct Andrew Lansley’s large and disastrous Health and Social Care Act.
In 2016-17 the King’s Fund found that management consultants were being used to support the development of STPs in three out of four areas: and firms including McKinsey were employed again and again at a combined cost of over £80m in the long running fiasco of the Shaping a Healthier Future project in North West London before it was axed – only for McKinsey veteran Penny Dash to be installed last year as the chair of NW London’s “integrated care system”.
In 2019 NHS England paid PA Consulting over £200,000 for a 35-day “function mapping exercise” to work out what NHSE itself was responsible for: last year Matt Hancock’s department brought in a team from McKinsey for six weeks at a cost of £563,000 help define the “vision, purpose and narrative” of the new body to replace Public Health England after his announcement it was to be axed.
But these ridiculous smaller projects pale into insignificance against the industrial-scale efforts to streamline the recruitment of consultants to work at local NHS trust and commissioner level with the establishment in 2018 of a 4-year “Framework agreement” with a pre-approved list of 107 companies which can simply be hired without a tender process.
The sales blurb, from privatisation enablers NHS Shared Business Services, lists ten specific areas of consultancy that are covered, including: Healthcare Business Consultancy, Leadership & Governance Strategy; Healthcare Service Business & Transformation; Healthcare Innovation & Research; Health & Community. It promotes the Framework as:
“A fully OJEU compliant route to market for the provision of multidisciplinary consultancy services; covering a wide range of specialisms. … Pricing options include day rates and also the possibility to agree innovative pricing models.”
The usual big names are all there – PwC, Deloitte, EY and KPMG, along with the US big names McKinsey, Bain and the Boston Consulting Group: but consultancy.uk points out the long list also includes “boutique” consultancy firms and specialist healthcare consultancies, which have a long-standing relationship with the NHS.
England’s NHS is being reorganised into 42 Integrated Care Systems (ICSs) with new cash-limited “single pot” funding arrangements: this brings with it pressure to increase spending on private sector management consultants, data and digital providers – and this in turn is facilitated by NHS England’s establishment of the ‘Health Systems Support Framework’ (HSSF).
The HSSF is a 4-year £700 million framework “established to provide a mechanism for ICS and other health and social care organisations to access the support and services they need to transform how they deliver care. It focuses on specialist solutions that enable the digitisation of services and the use of data to drive proactive population health management approaches across Primary Care Networks (PCNs) and integrated provider teams.”
It follows on from the 2018 management consultancy framework, and offers a pre-approved list of 83 firms, more than a quarter of which are US based, pre-approved for work on ten different “lots.”
One ICS which clearly displays the extent to which it is being taken over by costly management consultants is Bedfordshire, Luton and Milton Keynes (BLMK), where the lucky winners of seemingly endless consultancy work are Carnall Farrar, who have pushed ahead with the merger of the three CCGs, and United health subsidiary Optum, whose representative Kane Woodley has a seat on the Partnership Board.
The BLMK ICS Partnership Board papers from September showed Carnall Farrar’s determination to press through with the merger of CCGs into a single CCG covering the ICS area, despite the clearly stated opposition of three of the four local authorities at the July meeting.
But they also revealed the extent to which the relative size and influence of the NHS bodies would diminish during the process of establishing the ICS, reducing any vestige of local accountability, and increasing the power and control exercised by Carnall Farrar: “It is expected therefore that the BLMK CCG will reduce in size over time as we implement the co-designed Target Operating Model for the strategic commissioner.”
However a progress report by Carnall Farrar in February has revealed just how ineffective their bullying tactics have been in achieving any genuine integration between the NHS bodies in BLMK, let alone with the local government “partners”.
And, as the ICS proposals set out in the White Paper are formulated into legislation, potentially entrenching long term and more powerful roles for management consultants, it’s useful to remember the warning from the Financial Times in 2017, which drew a thinly disguised analogy between consultants and vermin:
“The … danger is that consultants become a habit — once they get inside the building, they are hard to eradicate. They have an interest in keeping the relationship going, either by persuading clients that the challenges are complex, or by selling them more services.”
The more reliance NHS management place on management consultants, the less the focus on patient care and public accountability, and the greater emphasis on “business” methods, markets, profits … and finding new roles for even more private contractors.
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