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NHS becoming ‘cash cow’ for consultancy firms as contracts quadruple in value

Exclusive: NHS England allocated £83m for outsourced consultants last year – enough to train more than 1,600 new nurses

Adam Bychawski
10 February 2023, 2.05pm

Firms involved in failed Test and Trace programme were handed fresh contracts.


Lankowsky / Alamy Stock Photo

NHS England more than quadrupled its budget for outsourced consultancy work to £83m last year, new figures obtained by openDemocracy show.

The combined value of the health service's consultancy contracts in 2022 could have trained more than 1,600 new nurses or paid for almost 14,000 hip operations. 

Campaigners said the “ludicrous sums” are proof that the government has failed to learn from the billions the Department of Health and Social Care wasted on consultants for its ineffective NHS Test and Trace scheme during the pandemic.

Several of the consultancy firms that worked on the £37bn Covid testing programme were awarded NHS contracts last year, despite an inquiry finding the scheme failed to slow the pandemic and was “overly reliant on contractors”.

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In total, NHS England awarded £83m worth of consultancy contracts last year – a fivefold increase on the £16m it awarded in 2021, according to data supplied by Tussell.

This included a contract worth up to £21m awarded to seven top consultancy firms in 2022 to help provide “short-term analytical and planning support” for tackling its post-Covid backlog.

The seven firms – which include Deloitte, Boston Consulting Group, KPMG, PriceWaterhouseCooper and McKinsey – could each be paid millions to help the 42 boards that manage NHS England services regionally to draft plans aimed at reducing waiting lists. 

But campaigners have questioned whether the consultants can be trusted to put patient’s interests first.

“The more reliant NHS management becomes on management consultants, the less it focuses on patient care and public accountability, and the more emphasis it places on business methods, markets, profits and finding new roles for even more private contractors,” said John Lister, co-founder of the Save Our NHS campaign.

NHS England bosses have already told regional boards that their plans “need to include specific detail on how the system will maximise use of independent sector provider (ISP) capacity.”

In 2020, DHSC paid staff at two of the seven firms, Deloitte and Boston Consulting Group, as much as £6,600 a day to work on Test and Trace. The overall value of consultancy and auditing contracts handed to Deloitte by the NHS in 2022 increased from £590,000 in 2021 to £10m.

The data provided by Tussell shows how much NHS England – the national organisation responsible for running the NHS in England – budgeted to spend on each consultancy contract it awarded, but the actual spend could be lower or higher. The total consultancy budget for every NHS body in England will be higher, as local NHS trusts can also contract consultants but are not included in the data.

‘Ludicrous sums of money’

PA Consulting Group topped the list of NHS consultants in 2022, receiving a total of £22m worth of contracts, including £10m to support the Covid vaccination programme.

Consultancy firms appear to have increased their overall involvement in the vaccination programme, receiving NHS England contracts worth £23m in 2022 – compared to £14m in 2021. 

“This government’s eagerness to funnel public money into private companies in a variety of ways, while they starve public services of funding, is deeply concerning. It is also illogical. One report published in 2018 showed that employing consultants within NHS Trusts in England made things less efficient, not more,” said Dr Julia Patterson, chief executive of campaign group EveryDoctor.

“If the government wants to improve the service, they will start listening to healthcare leaders, clinicians and patients at a national and local level to create meaningful solutions, instead of paying management consultants these ludicrous sums of money.”

Dr John Puntis, a retired paediatrician and co-chair of Keep Our NHS Public said: “People often think of NHS privatisation in terms of selling off patient care services. In fact, the main area of action at present is backroom office support, embedding private companies within the NHS and extending their influence over the service as a whole. 

“The government is highly susceptible to lobbying by private firms as was highlighted during the Covid pandemic with the test and trace and PPE fiascos. These generous contracts to consultancies provide further confirmation of this. Increasingly, the NHS is seen as a cash cow for private companies.”

On Tuesday, the Guardian revealed that the government have quietly dropped restrictions on consultancy spending, allowing Whitehall departments to potentially spend millions more on big consultancy firms.

The changes come despite past warnings from ministers that consultants waste taxpayer money and “infantilise” civil servants.

While NHS England increased the total value of contracts it awarded to consultants in 2022, the total value of Department of Health and Social Care consultancy contracts dropped. In 2021, the department awarded £456,650,548 in largely Covid-related contracts to consultants, while last year it awarded £42,190,706. 

An NHS England spokesperson said: “The NHS continues to deal with the effects of a once-in-a-generation pandemic, and while the actual spend is likely to be lower than the maximum amounts described, it is right that local teams are able to access additional expert support in their efforts to restore and improve services for patients.

“The NHS is one of the most efficient health services in the world, and while our life-saving Covid-19 vaccination service was found by the Public Accounts Committee to be a great use of taxpayer money, expenditure on this – as well as in other areas – is set to dramatically reduce in the next financial year.”

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