Over the weekend, newspapers, radio and TV shows were full of the ‘shocking’ news that the NHS spent £313,819,000 on consultancy services last year.

Quite a few noted this was more than the health service had spent on skin and lung cancer services, or the equivalent of around 10,000 nurses.

However, there were no links to the raw figures, and a hunt around the Office for National Statistics and Department of Health websites failed to give any clue as to where they might have come from.

It’s not a huge revelation, but E-Health Insider can reveal that they were put out by one of Andrew Lansley’s special advisors. Who also provided the cancer and nurse references.

Shocked, I say

The figures released relate to strategic health authority and primary care trusts – not foundation trusts or other healthcare providers – and they are very high level.

Name 2009-10 expenditure on consultancy services Expenditure on consultancy services by the NHS per head of population
West Midlands area (SHAs and PCTs) £29,379,000 £5.44
East of England area (SHAs and PCTs) £27,201,000 £4.79
London area (SHAs and PCTs) £114,069,000 £14.96
South East Coast area (SHAs and PCTs) £22,519,000 £5.26
South Central area (SHA and PCTs) £23,331,000 £5.78
South West area (SHAs and PCTs) £11,131,000 £2.16
Yorkshire and The Humber area (SHAs and PCTs) £12,098,000 £2.33
East Midlands area (SHAs and PCTs) £19,759,000 £4.53
North East area (SHAs and PCTs) £14,273,000 £5.56
North West area (SHAs and PCTs) £40,131,000 £5.81

Spending appears to veer wildly from the much-quoted £12.2m or £51.04 per head of population of NHS Camden, to the £63,000 or 20p a head of NHS Bournemouth and Poole.

However, there is no indication of whether the variation is down to the way these organsations collect statistics, go about their business, or spend more or less time on activities that might involve consultants.

Nor is there much information on where the money went. Notes acknowledge that ‘consultancy services’ can cover: strategic advice; finance; organisation and change management; IT and information services; property and construction; procurement; legal services; marketing and communication; human resources; programme and project management; and ‘technical knowledge’ including project and engineering support.

Unfortunately, there is no breakdown of how much of each PCT spend went on these different components. It is clear that spending has increased over the past three years, from a headline of £6.4m in 2007-8, to £8.8m in 2008-9, and £14.2m last year.

This allowed health secretary Andrew Lansley to claim in a quote attached to the figures that “even at a time when the nation’s borrowing was out of control, Labour allowed wasteful spending to blossom.”

He also gave a shove to his own policies, adding: “In contrast, I have asked PCTs and SHAs to reduce their management costs by 46% over the next four years [with] every penny saved reinvested in improving patient care, meeting demand and driving up quality.”

Breaking a deal

There is no doubt that some NHS spending on consultancy services will have been questionable, at best. Over the years, E-Health Insider readers have expressed dismay at the National Programme for IT in the NHS’ decision to bring in big and initially brash consultancies as national and local service providers.

The high pay rates and attitudes of some IT consultants continue to rankle some commenters. It would be nice to see the NHS investing more in its own skill-sets and personnel.

Even so, this weekend’s stories should ring a few alarm bells, since they amounted to health secretary Andrew Lansley attacking the organisations that his own department runs.

As Nigel Edwards, the acting chief executive of the NHS Confederation, tried to tell BBC Radio 4’s Today programme on Saturday morning, SHAs and PCTs are likely to have incurred a lot of their consultancy spending pursing government policies.

There has been a change of government and it can be safely assumed that the new coalition does not like a lot of those policies. Even so, Edwards argued, Lansley has gone against the unspoken compact that says government doesn’t criticise the bodies that it gets to do its work.

More worryingly, Lansley was prepared to go around the sources of official statistics, and the non-partisan DH press office, to do this. Of course, he was helped by a press that was generally happy to say it was working with ‘government’ figures that had been ‘published’ even when they were not generally available.

Yet one of the claims often made against New Labour was that its ministers never got out of opposition mode and settled into the detailed grind of government. This weekend’s news stories suggest that Lansley and his advisors have still to make the same transition.

Consultancy rising?

They may soon come to regret this, because all the signs are that spending on consultancy is likely to rise under the Conservative-Liberal Democrat administration. The white paper ‘Equity and Excellence: Liberating the NHS’ not only wants SHAs and PCTs to spend less on management, but to abolish them altogether.

To replace them, GP consortia will be set up that will be actively encouraged to look to the private sector for a range of commissioning and contracting skills. Providers, too, are being encouraged to become more market-orientated.

At the same time, the range of arms length bodies that provide best practice advice and other skills to NHS organisations are being slimmed down, told to operate on a more commercial basis, or transferred wholesale into the private sector.

Just last week, communities and local government minister Eric Pickles announced that the Audit Commission would be abolished and its audit work transferred to the private sector so councils – and quite possibly NHS and housing associations – could choose auditors from an “open and competitive” market.

Interestingly, Pickles also felt it necessary to leak against the body he wanted to abolish. Today, Commission chairman Michael O’Higgins mounted a spirited rebuttal of the charge that it had spent “lavishly” on “days at the races” and other “junkets” on its website.

A few years down the line, it may well be open to a revitalised opposition to claim that the coalition has “wasted billions” on expensive consultancy, lawyers and auditors. Lansley or a successor will not be able to complain if it does.