NHS trusts expected to slash spend on management consultants by up to half

By Ian Quinn

NHS managers have been told to slash their spending on external consultants by up to half, leaving a raft of contracts with private firms set to be axed or scaled back.

A briefing document sent out to trusts by the NHS Confederation reveals the scale of the cuts could save the average PCT £600,000 a year.

The document, which advises trusts how to achieve the requirements of the Government's operating framework for the NHS for 2010/11, says that all NHS organisations will be expected to ‘rigorously consider how to reduce their back office costs', and states the DH is directing trusts to ‘aim to cut spending on consultancy by 50%, communications by 25% and IT project costs by 10%.'

Both the Government and the Conservatives have set out plans for huge cutbacks in PCT back office costs.

In October, the Conservatives promised to cut total spending on administration by PCTs, strategic health authorities and dozens of NHS quangos by one third and the Government has promised to cut NHS management spend by 30%.

But the document shows the cutbacks will punch huge holes in the profits of the raft of private firms that have reaped massive rewards from lucractive NHS contracts.

Last year a Pulse investigation showed spending on management consultants had more than tripled in the previous two years as NHS chiefs threw millions at the private sector.

An analysis of figures from 62 PCTs obtained under the Freedom of Information Act found that each PCT was spending an average of £1.217m on external consultants – up from £361,000 since 2006/7.

Last week NHS Manchester came under fire from MPs after revealing a £1m deal with consultant KPMG on how it could get out of its £18m debt crisis.