RCN Welcomes Calls For Full Disclosure Of Management Consultancy Costs In Health

Main Category: Nursing / Midwifery
Also Included In: Public Health
Article Date: 07 Jun 2009 - 1:00 PDT

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Commenting on a new report on the use of management consultants by the NHS and the Department of Health, published by the Health Select Committee, Dr Peter Carter, Chief Executive & General Secretary of the Royal College of Nursing (RCN), said:

"The Committee is absolutely right to call for complete transparency when it comes to health spending on management consultants. With belts tightening across the NHS, it is time for the Department of Health and all NHS organisations to offer a full and frank justification for every penny they spend on management consultants. The RCN found it very difficult to get full disclosure in a number of parts of the NHS in response to our recent Freedom of Information request, and is currently following up with these organisations. It is deeply concerning that the NHS is not open about how much it is spending, even when there is a legal obligation

"With budget cuts on the horizon, patients and staff have a right to know that money spent on management consultants is delivering good value for money, and to see evidence of how it is improving patient care. Just last month, we found that reducing the money spent on external management consultancy could deliver 11% of the expected reduction in government spending on health announced in the 2009 budget, without jeopardising patient care."

Notes

In May, the RCN released figures showing that the NHS spent £350 million on external management consultants in the last financial year . More than £273 million of this was not related to direct patient care. This equates to the cost of 330 fully staffed medical wards each with 28 beds.

The figures were obtained from 240 NHS organisations in England, such as Primary Care Trusts (PCTs) and Strategic Health Authorities (SHAs), under the Freedom of Information Act. More than 40% of organisations did not respond within the deadline required in law. The RCN is currently pursuing these organisations both for full disclosure of their spending and for an explanation of why the information was not made available for proper scrutiny.

These figures demonstrate that the NHS remains the fourth largest user of external consultancy . Reducing the money spent on external management consultancy could deliver 11% of the expected reduction in government spending on health announced in the 2009 budget, without jeopardising patient care.

Of the £350 million spent on management consultancy, 78% is unrelated to direct patient care. With this money (£273 million), the NHS could pay for -

- 330 fully staffed medical wards with 28 beds each
- 9,160 experienced staff nurses
- 3.1 million community midwife visits
- 267,647 bed days in a neonatal intensive care unit
- 10.5 million school based vaccinations such as BCG or HPV

Dr Peter Carter, Chief Executive & General Secretary of the Royal College of Nursing (RCN), said:

"These figures are utterly shocking when you consider the difference that this money could have made to patients. A very significant sum of money is clearly being spent on setting up competition in the NHS and pursuing Foundation status, rather than being invested in patient care. You only have to look at what happened at the Mid Staffordshire NHS Foundation Trust to see the consequences of this. The RCN believes that the full expenditure may be considerably higher, and we will be pursuing all NHS organisations to reveal the full extent of this expenditure. No NHS organisation should be allowed to exclude themselves from proper scrutiny.

"Before the Department of Health and local health Trusts look at cutting frontline services, training budgets or new facilities, they need to look very carefully at the money spent on external advice and what value is added to the patient experience. When some individual management consultants are getting more than £1000 a day to advise on finance, we must surely be able to afford improvements to the quality of patient care. It is also quite wrong that the NHS is not open about how much it is spending, even when the information is requested under the Freedom of Information Act.

"Savings in this area could contribute a huge proportion of the savings to be made by the Department of Health following the 2009 budget, without jeopardising patient care. With £273 million for frontline services, we could provide 330 new fully staffed medical wards delivering care to patients in need. Instead, this money has been spent on external management consultants developing competition within the NHS. Where that pursuit has been at the expense of patient care it cannot be allowed to continue."

Some of the work consultants have been paid for included
- Market testing and development (39%)
- Supporting Foundation Trust applications (23%)
- Provider separation, which relates to the separation of governance and financial management of Primary Care in terms of commissioning and providing services (13%)
- Private Finance Initiative advice (12%)

The RCN made requests to 550 NHS organisations across the UK, of which 296 gave full responses. Data used relates to the 240 organisations who returned information in England only.

There is a wide variation in how NHS organisations track their spending on external consultancy, despite the recommendations from the National Audit Office in 2006 that government departments should monitor spending in a more uniform manner.

Some organisations declined to respond on the basis that the work required to provide the information may exceed the 18 hours/£450 threshold provided under section 12 of the Freedom of Information Act 2000.

The information gained from Freedom of Information requests is, in law, the property of the individual organisations concerned and therefore no information can be given about the specific responses.

The RCN calculates that 78% of the money spent on external management consultancy has no direct impact on patient care. The other 22% consists of money spent on projects such as clinical service reviews, productive ward and related initiatives, specialist advice on clinical pathways, improvements to the patient environment and audit systems for improving the quality of care.

In the Budget for 2009, it was announced that the Department of Health will be contributing £2.3 billion in additional savings to the overall reduction in Government expenditure and borrowing.

More information about the RCN's concern over trusts pursuing Foundation status can be found here.

Source
Royal College of Nursing (RCN)