Consultancy cost is the '˜economics of a mad house'

Private consultancy firms raked in nearly £600,000 after being brought in to help draw up controversial cost-cutting plans for the health service.

Lucrative contracts worth more than £18m in total were handed out to management consultants involved in drawing up the five-year Sustainability and Transformation Plans (STPs).

The plans will see an estimated £22bn slashed from health budgets in England - including £577m in Hampshire - as government funding falls below the cost of providing services.

Hide Ad
Hide Ad

The country was divided up into 44 STP areas which have been drawing up plans to merge A&E and maternity departments, reduce beds and downsize hospitals between now and 2021.

Figures released under freedom of information rules reveal payments to consultancy firms including McKinsey, KPMG, PwC and Deloitte totalling £18m.

The true figure is likely to be higher because information could not be provided for all the different organisations in each STP area.

In Hampshire, £576,736 was spent on bringing in the private consultancy firms.

Hide Ad
Hide Ad

Figures obtained by Johnston Press’ investigation unit found:

n Deloitte – £472,601 for ‘STP Programme Management and Development’.

n MJMPR Consulting – £26,675 for ‘STP Communications’.

n MBI Health Consulting – £63,960 for ‘STP Project Management’.

n Consilium – £13,500 for STP ‘Co-ordination and Development’.

Hide Ad
Hide Ad

Peter Chegwyn, Liberal Democrat opposition leader at Gosport Borough Council, said: ‘It’s a crazy system.

‘It’s being privatised by stealth. We pay all this money in consultancy costs when the money would be better spent on NHS staff.

‘It’s economics of the mad house.

‘It would be much better to employ the staff through the NHS rather than private consultants at twice the 

‘It’s costing more and we’re getting less.’

In all, figures obtained by The News and its sister titles’ investigation unit showed multi-national accountancy firm PwC made the most money out of STPs with payments totalling more than £5.7m.

Hide Ad
Hide Ad

McKinsey, a US management consultancy which advises companies and governments on out-sourcing, made £1.3m from STP work.

KPMG, a global company which provides auditing and tax advice to companies, was paid £1.5m from different STP contracts.

Richard Samuel, head of Hampshire and the Isle of Wight STP said: ‘The cost was dwarfed by the amount of time spent by local care and health staff working on the plans themselves.

‘It was work that we needed for a fully-costed and qualified services strategy.’

Hide Ad
Hide Ad

He said that the work split into several areas, including doing a ‘deep-dive’ financial analysis, with an actuarial analysis.

Communications staff were also included in the consultancy costs, along with events and consultation with patients and clinical staff, Mr Samuel said.

He said the spend on consultants is dwarfed by the £3bn healthcare system in Hampshire and the Isle of Wight.

Related topics: