CfH one of ‘big three’ users of consultants

NHS chief executive David Nicholson has identified NHS Connecting for Health as one of the big three users of management consultants in the health service.

However, at a House of Commons Health Committee evidence session, he said the Department of Health was looking to “significantly reduce the amount of consultancy we use” and members should “see it come down significantly within six months.”

Mr Nicholson said “significant amounts” had been spent on consultancy by CfH, the DH’s Commercial Directorate and the ‘turnaround teams’ that had been sent into organisations facing financial difficulties.

He argued that the first two had used consultants because “at the time we were developing these things, there were simply not the people out there for us to recruit.

“It was not an issue that we could get a lot of people to do these really very complicated technical things, so we had to use consultancy significantly.”

Romsey MP Sandra Gidley suggested that CfH was “probably not the best example to use for money well spent.” But Nicholson disagreed.

“It is a very good example to use of money well spent,” he insisted. “It is probably one of the best managed, in financial terms, computer systems that the government has ever had.”

The Health Committee undertakes an annual Public Expenditure Questionnaire of DH expenditure and holds evidence sessions on it. Normally, these are not published.

But yesterday, the committee broke with tradition and issued a report highlighting Nicholson’s comments on management consultancy at two evidence sessions; one in December on the PEQ and one in March on the NHS Operating Framework.

At the PEQ session, Nicholson said the DH did not collect information on how much the NHS as a whole spent on management consultancy, although “we have started the process of collecting the information.”

He also agreed with Dartford MP Dr Howard Stoate that “we should have collected the information in the past.” But at the Operating Framework session, he said collecting the information would lead to the ‘micromanagement’ of the NHS.

In a commentary, the committee said it agreed with Nicholson’s earlier comments and called for the NHS to collect and publish information on its use of external management consultants and the daily rate that it paid. It also called for a sample of contracts to be subject to external peer review.

The British Medical Association, which recently launched a campaign against the “commercialisation” of the NHS and the attendant use of management consultants, welcomed the report.

The NHS is thought to spend around £350m a year on management consultants, and the BMA said this could be better spent on patient care.

The December evidence session was also notable for Nicholson indicating that the DH was tendering for alternative suppliers to the National Programme for IT in the NHS.

The official transcript of his comments says: “In parallel to this [working on Lorenzo and Millennium] we are going out again to tender to a variety of other organisations to see whether now there are other organisations who could also provide us with this service. It is always helpful, I think, for us to have reserves if one of them fails.”

However, CfH has insisted to E-Health Insider that Nicholson was referring to the ASCC catalogue and its use in the South of England, where there is no single local service provider following Fujtsu’s exist last year.

Link: The House of Commons Health Committee: The use of management consultants by the NHS and the Department of Health: fifth report of session 2008-09.