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GP commissioners slash NHS spending on management consultants

Exclusive GP commissioners are shunning management consultants and have dramatically cut NHS spending on external support since CCGs assumed full budgetary responsibility in April, a Pulse investigation reveals.

Figures obtained under the Freedom of Information Act from 141 CCGs across England show an accumulated spend of £5.66m since April on consultancy firms such as McKinsey & Company, PwC, KPMG and Capita - an average of £42,300 per CCG.

Extrapolated across all 212 CCGs, the investigation suggests that just under £9m has been spent across England so far, a sharp reduction on the estimated £26m spent by PCTs between April 2012 and December 2012. Some 27 of the 138 CCGs who were able to provide a figure for spending told Pulse they have spent no money at all on external consultants this financial year.

Commissioning leaders welcomed the drop in spending, claiming the figures showed CCGs have the expertise to deal with many issues that would have previously required private consultancy services.

But the figures also show that a number of CCGs were forced to spend money on external support after the troubled rollout of the NHS 111 urgent care number, which was originally commissioned by PCTs.

The lead CCGs for NHS 111 in the North West and the West Midlands – Blackpool and Sandwell & West Birmingham respectively – both turned to consultants for support. Blackpool spent a large chunk of its overall £150,102 spend on ‘supporting the work around the re-negotiation of the NHS 111 contract’, while Sandwell & West Birmingham spent its £80,160 on end of life care, NHS 111 and safeguarding. When asked, neither CCG would specify the exact amount, nor what services were required.

Other CCGs to turn to consultancy support when dealing with NHS 111 included Vale of York, South Cheshire and the Isle of Wight.

The FOI responses also identified significant spending by CCGs in southeast London for work around the trust special administration (TSA) process with South London Healthcare NHS Trust - a process which eventually resulted in the High Court overturning health secretary Jeremy Hunt’s decision to close Lewisham Hospital’s A&E department.

The work around the TSA process was carried out by McKinsey & Company, with Bexley CCG paying £150,000 to the consultants, Greenwich CCG spending £73,333 and Lewisham CCG some £37,667. Lambeth CCG said it spent part of its total £106,000 on services connected with the TSA, and Southwark CCG reported an overall spend of £35,000, though neither CCG specified how much of their spending was on TSA work.

Nationally, the CCG which spent the most on consultancy support was Oxfordshire, with spending since April totalling £503,364. The CCG said that the bulk of this was on an ‘innovative outcome-based commissioning project’, initially dealing with maternity services, mental health and elderly and frail patients.

A CCG spokesperson said: ‘Developing this [outcomes based] approach is not only a way in which to ensure higher quality services based on what matters to patients, but will also provide a more cost-effective way of commissioning services. Getting the approach right is complex and needs specialist skills.’ 

‘Oxfordshire CCG is therefore employing the expertise of an experienced specialist consultancy to support them with the development and implementation of this new approach – the cost of this additional support is part of Oxfordshire CCG’s running cost allowance…  Outcomes-based commissioning will also provide a platform for Oxfordshire CCG to make real progress in tackling its financial situation as this new way of commissioning services will have cost saving benefits over the long term.’

NHS Tameside and Glossop CCG was the second highest spender, with more than £300,000 spent on consultancy services for ‘programme projects’ and ‘corporate costs’ since April this year.

The reduction in consultancy spending this year follows falls in previous years as well, with a Pulse investigation previously having estimated a total spend by PCTs of £238m in 2008/9. However the reduction was by no means assured, given that some 40% of CCGs had already decided to enlist private sector support by January 2012.

Dr Michael Dixon, interim president of NHS Clinical Commissioners and chair of the NHS Alliance, welcomed the overall drop in spending.

‘It’s good news that spending is going down and we will continue to see it going down,’ he said. ‘It is quite a dramatic drop compared to massive amounts of money spent a few years back. In my view it is a trend we’re going to see.’

‘A while back we gave feedback on how things should be done and there is no disconnect anymore like there used to be. The CCGs have managers who they can go to’.

However, others said CCGs should be going even further in curbing spending on consultancy services.

Dr Kailash Chand, deputy chair of BMA Council and a retired GP from Lancashire, said: ‘There should be better utilisation for this money - it would be much better spent on patient care. There are already so many cuts being made, so why can’t they reduce their spending here? Why can’t such services be carried out in-house?’

Readers' comments (7)

  • The management consultant we had when we were trying to enlarge our premises was a joke. All he wanted to talk about was his time in high finance and the only reason he was kept on was because the practice manager fancied him!

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  • I suspect the CCGs are finding ways to keep this spending off the books - or are getting funded directly by government for it. The figures for management consultancy in relation to Lewisham are certainly drastically lower than I have heard from GPs in the area. In as far as they are spending less, its probably because increasingly, the real decisions are being taken by CSUs or Monitor - both still heavily addicted to / staffed by former management consultants.

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  • This is total rubbish. Spend on consultancies was already coming down fast and CCGs have just continued the trend

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  • Mmm and is this not beginning to show? We specialise in tendering and procurement. The evidence we have from across the country is that CCGs do not have the specialised skills required to operate in this very specialist, legally regulated area of work. We have a list of providers who wish to report poor, possibly illegal, tendering practices to Monitor. However the NHS Procurement Regs do allow for challenges under the Public Contracts Regulations i.e. to go straight to law.If this were to happen, not only would any savings be eaten up in short order. There is also a risk that CCGs would finish up spending money on defending legal actions rather than patients. Surely it has to be horses for courses. Babies and bathwater also spring to mind.

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  • How much are the CCGs spending on the commissioning support units, which seem to be taking over the role of consultants? One of the London CSUs recently advertised a deputy head of communications on a salary of £80 -100,000 to oversee a staff of 35 communications professionals. One of the required skills was disaster management! Another, providing support to 12 CCGs, says it has 600 staff. Has anyone compared the staff numbers and costs compared to the PCTs and SHAs (considering community care has been hived off separately)?

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  • Having worked with management consultancies in the past, I think CCGs would usually be wise to put their money elsewhere. The onus of proof is on the consultancy to justify their prices. I would suggest that consultancies which suggest they can make CCGs' work more efficient - or at least cheaper - be offered payment solely as a percentage of the nett savings actually achieved.

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  • @ Anonymous 9.36am

    Thanks for your comment. You are right in saying there has been a trend in reduced spending over the past few years - and we have added a paragraph to that effect. However there has also been a suggestion that CCGs would need to rely more heavily on external support, and indeed last year they were showing signs that might be the case (see here: http://www.pulsetoday.co.uk/40-of-clinical-commissioning-groups-enlist-private-sector-support/13268657.article#.UneblHA5TSk), so today's findings definitely feel significant...

    Steve Nowottny
    Editor, Pulse

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