Consultancies cash in on NHS Sussex

By Paul Lacey

NHS Hospital sign with older man walking by it.

Over £2 million was spent on management consultancies and related services by Brighton and Hove Primary Care Trust as part of the NHS Sussex PCT over the last three years.

From late 2009 – 2012 the trust spent £2,253000, the equivalent of 2356 Hernia operations or 125 full-time staff nurses, on consultants whose services may now be void due to the imminent dissolution of the trust structure in favour of the new Clinical Commissioning Groups in 2013.

Some consultants are reportedly paid around £500 – £1500 a day according to a Home Office Health Committee report looking into NHS consultancy spending across the UK.

Companies contracted by the trust included many of the international consultancy heavyweights such as KPMG and PriceWaterhouseCoopers, firms that would be able to command the upper fee limits.

Sussex PCT also confirmed that it has awarded new contracts in 2012 to many private healthcare companies and consultants such as BMI, Ramsay and Spire, along with Southern Cross Healthcare, the residential care provider that faced bankruptcy, putting thousands of older people at risk of homelessness.

Contracts for private companies are likely to increase drastically as the controversial Health and Social Care Act 2012 became law earlier this year, giving a green light to the commercial deregulation of health care provision in the UK as the new Clinical Commissioning Groups (CCGs) replace the PCTs.

Caroline Lucas, Green MP for Brighton Pavilion, said: “The GP members of these CCGs are permitted to use – and may well have to use – commercial organisations such as McKinsey and KPMG to enter into thousands of contracts on behalf of the CCGs – all subject to commercial confidentiality.

“Commissioning is a full time job and GPs will no doubt be forced to club together to bring in the private sector to do it for them.”

If Caroline Lucas’s fears are correct, this will be good news for management consultants and contractors alike as millions of pounds from the public purse are spent on private providers.

Even the health minister, Andrew Lansley, decried the use of management consultants in the NHS and vowed to crack down on them but the increase in such expenditure seems inevitable

The Conservative-led coalition government forced through the HaSC Act 2012 to become law on 27th March in what proved to be the most controversial and difficult piece of legislation to become statute so far in their term.

Andrew Lansley’s proposal had a stormy passage, with opposition from: the public; the health unions; professional bodies; and not to mention the House of Lords.  In fact, the peers forced a two-month wait before the final draft was codified and it included more than 1000 amendments to the original proposal.

Even before the HaSC Act was enacted, the coalition government had announced its intentions to ‘empower patients’ in its July 2010 White Paper entitled: ‘Equity and excellence: Liberating the NHS.’

The paper stated that the government’s ambition for the health service was to: make the service more accountable to patients; free staff from excessive bureaucracy; and increase spending in real terms for every year of parliament.

For a government touting the economic ideology of austerity it seems like increasing spending on the health service would be difficult task. Yet the stated aim was to reduce the administration costs of the NHS by 45% and thus transfer those savings to front-line services.

In preparation for this, Sir David Nicholson, the chief executive of the NHS, announced the creation of ‘PCT Clusters’.  These clusters were designed specifically with the ‘Equity and excellence’ White paper in mind.  This was however, a far-sighted act indeed considering that the Health and Social Care Act didn’t become law until 14 months later.

The new guidelines created NHS Sussex. This cluster consists of: West Sussex, Hastings & Rother, East Sussex Downs & Weald and Brighton & Hove.

The rationale behind the action was to quote Sir Nicholson “keep a particularly tight grip on finance, performance and quality, the end-point [of which] for the current national and regional tiers of the system is a single organisation covering the whole country and supporting a vibrant system of local consortia: the NHS Commissioning Board”.

To do this however, NHS Sussex had to bring in private management consultants; something that the British Medical Association (BMA) said was ‘unnecessarily’, as existing NHS primary care trusts (PCTs) had the same skills and should have been given the job instead.

It was reported in the Guardian that over £300 million had been spent on these private sector consultants in 2009, a figure that was lambasted by Lansley, who was: “staggered by the scale of the expenditure on management consultants in the NHS. Even at a time when it became clear that the nation’s borrowing was out of control”.

The health secretary commented that the previous Labour government’s expenditure on management in the NHS would be curtailed. Yet the shadow Health Minister Andy Burham argued that the new system will inevitably result in an increase of private consultancies in helping to create a similar administrative body governing the GP consortiums.

NHS Sussex is to be split into seven new divisions under these new arrangements, requiring overarching GP consortia to hire or create a vast array of new administrative bodies.  This would suggest that far from making savings on private consultants, the bonaza is just beginning.

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