Ian Kirkpatrick, Andrew Sturdy, and Gianluca Veronesi
A recent study on the impact of management consultants on public service efficiency, published in Policy & Politics, prompted this letter from the authors calling for a moratorium on their use until effective governance is established.
Open letter to the Rt Hon Jeremy Hunt MP, Secretary of State for Health and Social Care
2nd July, 2018
Dear Mr Hunt,
Re Calling for a moratorium on the use of external management consultants in the NHS until effective governance is established
We recently conducted independent research on the use of external management consultants in the NHS in England. This was subjected to peer review to establish the rigour of its analysis and published in an academic journal (Policy & Politics). Since then, it was mentioned in a parliamentary debate (23rd April, 2018, Hansard Volume 639) and widely reported in the media (21st February, 2018), including in The Times, which has also seen this letter.
We found, to our surprise, that expenditure on external management consultancy by acute trusts led to an increase in inefficiency, both overall and in the vast majority of individual cases. Each of the 120 trusts we studied spent 1.2 million p.a. on average on external consultancy. Arguably, this money could have been spent more productively (for example to employ more managers or on alternative sources of consulting advice from within the NHS itself).
We recognise that there is sometimes a need for external advice or support and that efficiency is not the only aim of using external management consultancy. However, given the volume of external consultancy use in the NHS (c£300 million p.a.), the lack or external scrutiny and the need to ensure value for money in all aspects of healthcare, there is significant cause for concern.
We are therefore calling for a moratorium on external management consultancy (for projects over £50,000). This should hold until a full, in-depth independent review of management consultancy practices and use in the NHS is conducted and effective governance can be established. In future, there should be an evidence-based approach to commissioning and evaluation and greater openness to alternative sources of expertise, including the use of internal NHS management consulting.
This call is in the context of the ongoing debate about the productivity gains that the Prime Minister expects the NHS to achieve to make best use of increased funding in future. Our research strongly suggests that significant efficiency gains can be made by stopping the excessive use of external management consultants. Recently, the Academy of Medical Royal Colleges and NHS England have been exploring ways in which to discard low value medical interventions, in an effort to free up resources for more effective treatments. We feel that the same principle should be applied to management interventions. Just as the use of ineffective treatments denies patients better options, so too does counterproductive spending on management consultancy. Not only does this spending waste money, it diverts efforts and resources from changes that could improve services.
We recognise that the management consulting industry represents a powerful lobby group and that individual firms can be highly influential, including with strong relationships with civil servants and politicians from all sides. We therefore call on you to use your position, standing above these competing demands, to take the lead in establishing a framework that will ensure better commissioning and use of management consultants in the wider public interest.
Professors Ian Kirkpatrick (University of Warwick), Andrew Sturdy & Gianluca Veronesi (University of Bristol).
The letter was published today in The Times and awaits Mr Hunt’s response.
You can read the original research in Policy & Politics:
Kirkpatrick, Ian; Sturdy, Andrew J; Reguera Alvarado, Nuria; Blanco-Oliver, Antonio; Veronesi, Gianluca, The impact of management consultants on public service efficiency, Policy & Politics, DOI: 10.1332/030557318X15167881150799
Watch a vodcast by one of the authors:
Read further news coverage of this research article:
Consultancy firms make hospitals worse, The Times, 21 February 2018
Hospitals ‘waste more money’ after hiring management consultants, The Telegraph, 21 February 2018
Management consultants don’t save the NHS money – new evidence, The Conversation, 21 February 2018
Management consultants could be leading to NHS inefficiencies, study says, The Daily Mail, 21 February 2018
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