Consultancy 'gravy train' costs under fire on Bliar's black day
On the day that Tony “purer than pure” Bliar suffered the humiliation of becoming the first serving British prime minister to be interviewed by police conducting a criminal investigation and also his attorney general (possibly illegally) halted a separate criminal enquiry into bribes to Saudi Arabian citizens, the bad news that was cynically “buried” was the news that Labour's "external consultancy gravy train" was attacked by a spending watchdog as a report showed a 33 per cent rise in expenditure in the past year.
The government's "unprecedented" growth across the public sector on IT, management and other forms of consultancy reflected greater use of the private sector to deliver and support public services - but the labour government was still not securing value for money, the National Audit Office warned yesterday.
The NAO revealed the public sector had spent more than £7bn on consultants in the past three years - even judged against a tight definition of what consultancy involves. Edward Leigh, chairman of the Commons public accounts committee, said: "The external consultancy gravy train continues full steam ahead."
Central government's spend dropped marginally, from £2bn to £1.8bn. But big increases in local government and the National Health Service, up £700m over two years to £954m, saw the total across the public sector rise 33 per cent to £2.8bn.
Connecting for Health, the NHS's £12.4 IT programme, the injection of "turnaround teams" into financially distressed NHS Trusts and local government's growing use of IT helped explain that rise.
Several measures could generate about £1bn in savings over three years, the NAO said. Consultants should more frequently be required, as part of their contracts, to train public sector workers.
Better use could be made of inhouse staff who could cost around £550 a day rather than the £1,200 typically paid to consultants.
Services could also be bought more cannily. Too many contracts simply paid consultants for time and materials, rather than by results or for passing on their skills, the NAO said.
That helped explain why PA Consulting had racked up £34m in consulting fees on the national identity card scheme even as the project had slipped, with PA at one point earning £2.9m a month from the Home Office.
Departments on the whole did not measure internally how well individual companies, or individual consultants, did. In instances where that happened, the information was not shared across government, the NAO said.
In addition far too little use was made of existing "framework contracts" that could cut the costs of buying in consultancy. Barely a third of contracts were let that way.
The government's growing reliance on complex, large-scale programmes to provide modern, IT-enabled public services, its lack of in-house skills in project management - many of which were stripped out in the 1990s as government IT was outsourced - and its use of consultants to drive the efficiency programme all helped explain the scale of the spending, the NAO said.
Excess supply in the consulting business had also contributed to the rise as consultancies turned to public sector work when private sector work shrunk.
Taken from:
http://www.ft.com/cms/s/c608165e-8be0-11db-a61f-0000779e2340.html
Health Direct continues to be amazed at the scale of labour's consultancy bill. On Dec 01, 06 in DoH reveals true extent of NHS management consultant spend Health Direct noted that the imposition of turnaround teams on cash-strapped trusts has cost the NHS more than £22m, new Labour figures reveal. And the report showed that the DoH spent a massive £133m on management consultants last year -more than the £94m projected net deficit for the NHS next year.
The DoH admitted the estimated redundancy costs of the current NHS restructuring of payments to staff who lost their jobs under the reconfiguration of primary care trusts and strategic health authorities has been projected at 'around £325m', assuming an average age profile.
And the report showed that the DoH spent a massive £133m on management consultants last year -more than the £94m projected net deficit for the NHS next year.
It confirms that the DoH underestimated the annual cost of the consultant contract by £90m, and the Agenda for Change contract for nurses and managers by £220m, due to mistakes in calculating overtime and the cost of replacing staff working fewer hours under the contract.
The document also shows that in 2005-06 PCTs overspent by £196m on the GP contract, due to better than expected results from the quality and outcomes framework, and extra spend on out-of-hours care.
This was despite a £322m injection from the DoH to help PCTs commission and provide new services after 90 per cent of GPs opted out of the out-of-hours part of their contract.
The government's "unprecedented" growth across the public sector on IT, management and other forms of consultancy reflected greater use of the private sector to deliver and support public services - but the labour government was still not securing value for money, the National Audit Office warned yesterday.
The NAO revealed the public sector had spent more than £7bn on consultants in the past three years - even judged against a tight definition of what consultancy involves. Edward Leigh, chairman of the Commons public accounts committee, said: "The external consultancy gravy train continues full steam ahead."
Central government's spend dropped marginally, from £2bn to £1.8bn. But big increases in local government and the National Health Service, up £700m over two years to £954m, saw the total across the public sector rise 33 per cent to £2.8bn.
Connecting for Health, the NHS's £12.4 IT programme, the injection of "turnaround teams" into financially distressed NHS Trusts and local government's growing use of IT helped explain that rise.
Several measures could generate about £1bn in savings over three years, the NAO said. Consultants should more frequently be required, as part of their contracts, to train public sector workers.
Better use could be made of inhouse staff who could cost around £550 a day rather than the £1,200 typically paid to consultants.
Services could also be bought more cannily. Too many contracts simply paid consultants for time and materials, rather than by results or for passing on their skills, the NAO said.
That helped explain why PA Consulting had racked up £34m in consulting fees on the national identity card scheme even as the project had slipped, with PA at one point earning £2.9m a month from the Home Office.
Departments on the whole did not measure internally how well individual companies, or individual consultants, did. In instances where that happened, the information was not shared across government, the NAO said.
In addition far too little use was made of existing "framework contracts" that could cut the costs of buying in consultancy. Barely a third of contracts were let that way.
The government's growing reliance on complex, large-scale programmes to provide modern, IT-enabled public services, its lack of in-house skills in project management - many of which were stripped out in the 1990s as government IT was outsourced - and its use of consultants to drive the efficiency programme all helped explain the scale of the spending, the NAO said.
Excess supply in the consulting business had also contributed to the rise as consultancies turned to public sector work when private sector work shrunk.
Taken from:
http://www.ft.com/cms/s/c608165e-8be0-11db-a61f-0000779e2340.html
Health Direct continues to be amazed at the scale of labour's consultancy bill. On Dec 01, 06 in DoH reveals true extent of NHS management consultant spend Health Direct noted that the imposition of turnaround teams on cash-strapped trusts has cost the NHS more than £22m, new Labour figures reveal. And the report showed that the DoH spent a massive £133m on management consultants last year -more than the £94m projected net deficit for the NHS next year.
The DoH admitted the estimated redundancy costs of the current NHS restructuring of payments to staff who lost their jobs under the reconfiguration of primary care trusts and strategic health authorities has been projected at 'around £325m', assuming an average age profile.
And the report showed that the DoH spent a massive £133m on management consultants last year -more than the £94m projected net deficit for the NHS next year.
It confirms that the DoH underestimated the annual cost of the consultant contract by £90m, and the Agenda for Change contract for nurses and managers by £220m, due to mistakes in calculating overtime and the cost of replacing staff working fewer hours under the contract.
The document also shows that in 2005-06 PCTs overspent by £196m on the GP contract, due to better than expected results from the quality and outcomes framework, and extra spend on out-of-hours care.
This was despite a £322m injection from the DoH to help PCTs commission and provide new services after 90 per cent of GPs opted out of the out-of-hours part of their contract.
posted by Dr Search- Principal Consultant at the Search Clinic at
6:43 PM
0 Comments:
Post a Comment
<< Home