Management consultants raking in £3,000 a day from NHS

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Original article by Adam Bychawski republished from Open Democracy under a Creative Commons Attribution-NonCommercial 4.0 International licence.

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Campaigners question why huge sums are being handed to multi-billion pound companies over local health experts

NHS England is paying management consultants day rates of up to £3,000, despite the government claiming it cannot afford to give nurses and junior doctors a real-terms pay rise.

Some executives from top consulting firms including Deloitte and PA Consulting are being paid the equivalent of an annual salary of more than £600,000 by NHS England for their services – more than double what its own CEO is reportedly paid.

Deloitte, which charged the most for its consultants last year at up to £3,000 a day, was ironically hired to help NHS England improve how it keeps track of its spending on private companies.

The findings come after a deal was struck between health unions and the government for a 5% pay rise for more than a million NHS workers. Ministers had dismissed demands for an above-inflation rise on the grounds that it would be unaffordable.

Unite and the Royal College of Nursing rejected the offer, with the former saying that it fell well short of the current rate of inflation. Both are planning to continue with strike action, while the British Medical Association (BMA), which represents junior doctors, is continuing negotiations. The BMA is looking for a 35% pay rise to make up for 15 years of below-inflation pay increases.

Unite’s national lead officer Onay Kasab called the figures “a damning indictment of a government that seems intent on destroying the NHS and has learnt nothing from the pandemic, when it allowed the health service to be plundered by private sector profiteers”. He added: “The money would be much better spent providing a proper pay rise for NHS staff to end the recruitment and retention crisis that is crippling health services.”

The day rates were disclosed to openDemocracy through a Freedom of Information request only after the Information Commissioner’s Office warned NHS England that it could be taken to court if it continued delaying its response.

The figures also show consultants from PA Consulting were paid up to £2,500 a day to provide NHS England with support for its Covid vaccination programme between December 2022 and March 2023.

More than a dozen consultants from Ernst and Young were paid up to £2,343 a day last year to give NHS England recommendations for a system that would make it possible to share patient health records electronically between trusts.

The health service also forked out up to £2,350 a day on consultants from KPMG to support improvements to its digital services.

NHS England told openDemocracy that the rates are negotiated centrally by the government.

“It is absolutely appalling to see huge sums of money syphoned off into consultancy firms in this manner,” Julia Patterson, chief executive of NHS campaign group EveryDoctor, told openDemocracy. “At the very least, there should be published reports annually demonstrating the added value provided by contracting strategic advice.

“Local healthcare experts – such as the NHS clinicians, who are woefully underpaid – would be much better placed to offer advice about the planning and processes within their respective areas.”

The sums raise questions about whether the government has learnt from its disastrous NHS Test and Trace scheme, which was criticised for relying too heavily on private sector consultants. Deloitte staff were paid up to £6,000 a day to work on the programme despite an inquiry later finding that it failed to slow the pandemic.

At the time, the ballooning spending prompted a Cabinet minister to warn that consultants waste taxpayer money and “infantilise” civil servants.

Then cabinet secretary Michael Gove defended the use of consultants during the pandemic but conceded the government needed to reduce its overall spending on them.

In February, openDemocracy revealed NHS England quadrupled its budget for outsourced consultancy work to £83m – enough to train more than 1,600 new nurses or pay for almost 14,000 hip operations.

Tamzen Isacsson, chief executive of the Management Consultancies Association, said: “There are strict regulations for how the government procures management consultants and firms need to show they meet stringent cost and value criteria.

“The charge from consulting firms, which operate in a highly competitive market includes various operating costs that goes well beyond consultant salaries. The per day cost charged by consulting firms working in the NHS will include security system and technical requirements, product development costs, solution developments, legal costs, overheads, training and recruitment costs.”

An NHS spokesperson said: “The NHS is one of the most efficient health systems in the world, spending 2p in the pound on admin compared with 4p in Germany and 6p in France.

“NHS England uses Crown Commercial Service frameworks with government negotiated rates for management consultancy where it is necessary, and seeks to negotiate additional discounts to ensure best value for taxpayers.”

Original article by Adam Bychawski republished from Open Democracy under a Creative Commons Attribution-NonCommercial 4.0 International licence.

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