Starting next summer, the Department of Health will publish details of how much NHS organisations spend per year on management consultants, the government announced late last week.

The first such report will be for fiscal year 2009-10, says the government, which was responding to concerns expressed by MPs after NHS chief executive David Nicholson told them that the Department does not keep track of how much the NHS spends on consultancy fees.

Giving evidence to the House of Commons Health Select Committee’s recent inquiry into the use of management consultants in the NHS, Mr Nicholson had acknowledged that the Department should be collecting this information and added that it had now begun to do so. “I agree with you, we should have collected it in the past, but we did not,” he told the MPs.

In its response to the MPs’ inquiry report last week, the government acknowledges that while the Department collects data on how much its spends on its own use of management consultancy, it does not do so for NHS organizations, but points out that “the Department does not lead on the day-to-day running and organization of health services.” Nevertheless, it says, the Department now plans to issue guidance to NHS organizations as part of the 2009-10 financial reporting manual, in order to “bring consistency to this reporting” and, based on this, it will publish the details every year, starting next summer.

The MPs’ report also calls for a sample of management contracts agreed by all categories of NHS organization and the Department to be subject to external peer review, and says that this should include an assessment of the value of consultants’ output.

In its response, the government says the Department recognizes the need to improve the management and assessment of value from the consultancy services which it uses. It is, therefore, implementing procedures which allow people who used to be employed in consultancy but who now work directly for the Department to manage the commissioning and management of consultancy contracts.

“The aim of this work is to develop Civil Service skills that ensure consultants used by the Department are commissioned correctly and properly supervised throughout their commissions, and deliver quality outcomes at the best price,” says the government.

Moreover, the Management Consultancy Association (MCA) and the Department have agreed to work together to develop a code of conduct for MCA members, setting out how they should engage with NHS organizations, it adds.

- Mr Nicholson had told the Health Select Committee inquiry that consultants do “a useful job,” especially in undertaking work which NHS organisations and the Department do not have the skills for themselves.

However, given that “circumstances had in recent months changed dramatically,” a programme has now been put in place to significantly reduce the amount of consultancy used across the board, he said, and told the MPs: “you will see that come down significantly over the next six months or so.”