Contrary to recent accusations that the National Health Service has shelled out too much cash on employing the services of management consultants, a new report has found that such costs amounted to just 0.3% of the overall budget last year.

Moreover, the Management Consultancies Association’s report Improving care, reducing cost claims that far from being a waste of money many consultancy projects actually generated savings to the NHS “far in excess of their cost”.

The report, which, according to the MCA, is the first authoritative analysis of what is spent on management consultants and what they actually achieve, found that the NHS paid a total of £300 million last year for such services, which equates to about a 10th of what private sector organisations pay.

In addition, it stresses that the majority of spending on consultancy can be linked with an improvement in patient care and greater efficiency of services, clearly demonstrating the value they can bring to the NHS. One example cited in the report is that of Deloite, which says it has helped the NHS to save £2.5 billion over the last five years, “primarily through restructuring major elements of the NHS supply chain, including medicines”, money which can be injected straight back into patient care.

However, there remains a big divide in opinion over the role of external management consultants in the health service. The Royal College of Nursing, for one, is a strong critic, with its chief executive Dr Peter Carter previously describing the amount of cash spent on management consultants as “utterly shocking”. Furthermore, he told the The Telegraph earlier this year that cutting the amount spent on management consultants could generate 11% of the £2.3 billion savings targeted by the Department of Health in its budget.

Driving down costs?
On the other hand, Steve Barnett, chief executive of the NHS Confederation, argues: “Responding to major national policy changes often requires local planning and external advice and in many cases the use of this kind of expertise can help to drive down costs in the long-term”.

And Alan Leaman, Chief Executive of the MCA, said those who attack the use of management consultants by the NHS “are undermining efforts to increase efficiency and improve patient care…The public rightly demands high-quality services and value for money. Those who attack the role of management consultants would deny them both.”

According to the report, the NHS’ use of management consultants is unlikely to decrease in the immediate future, and so it lays out proposals to help improve their use and generate more benefit.

Broadly speaking, the MCA believes the NHS must: reduce its reliance on interim managers, changing its recruitment policies to help attract better quality permanent staff; modify its procurement processes, which it claims often fail to properly distinguish between consulting and interim management services, “encouraging expensive ‘bodyshopping’ where more targeted consultancy work would be more cost-effective”; and focus more on the outcomes of consulting projects rather than the input, as this will less likely lead to the use of consultants in positions which would be better filled by fulltime staff.