The Department of Health has spent almost £500 million on management consultants, including deals with firms which have hired senior Labour figures and high ranking civil servants.The disclosure of more than 100 contracts worth a total of £470 million last night engulfed the labour Government in accusations of “cronyism”.

Among those recruited by the favoured firms are a former health minister, an ex-adviser to the health secretary and a senior Whitehall official responsible for encouraging private sector involvement in the NHS.

Doctors’ and nurses’ leaders expressed concern over the use of resources which could have paid for more than 60,000 hip operations, or the annual salary of 22,000 nurses.

Critics also said the revelations indicated that the “revolving door” between the labour Government and its favourite consultant firms was spinning ever more quickly, with former senior politicians, officials and advisers linked to companies profiting directly from the policies they had introduced.

Lord Warner, a Labour peer, who was a health minister until December 2006, now acts as an adviser to PA Consulting group, which received £4.9 million from the Department of Health (DoH) in 2007/8.

Until last December he also advised Deloitte, which received almost £3 million in the same year.

Since resigning as a minister in 2006, the peer has also registered interests working for six other health care, technology and IT firms.

Matthew Swindells, policy adviser to then health secretary Patricia Hewitt between 2005 and 2007, who was earning £195,000 at the DoH, is now group managing director for health at Tribal, which earned more than £2 million from the department in 2007/8.

KPMG, the finance firm, secured £4.9 million in the same year. Last month the firm announced the appointment of Mark Britnell, currently on gardening leave from his £235,000 role as DoH director general for commissioning.

The civil servant was responsible for a policy to encourage more private sector involvement in the health service. He drew up plans which allowed a shortlist of firms – including KMPG – preferential access to lucrative NHS contracts.

Under rules intended to reduce conflicts of interests, Mr Britnell has been told that he cannot lobby the Government for his first nine months in his new job.

Other figures to have crossed from Government to private sector firms which won the management consultancy contracts include Sir Michael Barber, who was Tony Blair’s chief adviser on delivery – focusing on education and health – from 2001 to 2005.

Since September 2005 Sir Michael has been a partner at McKinsey, which was paid £9 million for management consultancy services to the DoH in 2007/8.

Lord Birt, the former BBC director general, was Tony Blair’s strategy adviser from 2000 to 2005. In 2006 he was appointed as an adviser to Capgemini UK, the British arm of the global outsourcing giant.

The DoH figures show that Capgemini UK was paid £3.2 million in 2007/8 for management consultancy to the DoH and the agency running the NHS IT programme.

Information released under the Freedom of Information Act discloses for the first time the details of 111 management consultancy contracts held by the DoH and two of its central agencies.

In total, the DoH, its IT programme Connecting for Health and the NHS Purchasing and Supplies Agency spent £470 million on management consultants in the three years from 2005/6 to 2007/8.

It came after the department had made hundreds of its own staff redundant via an “efficiency programme” intended to save money.

The spending came in addition to an estimated £350 million spent annually on consultants by 150 primary care trusts. Research has shown consultants in the NHS earning up to £2,000 a day for project work.

Matthew Sinclair, from the TaxPayers’ Alliance, said: “It is particularly alarming that many of these management consultants are political cronies or have only recently finished working for the Department of Health.”

Dr Mark Porter, deputy chairman of the BMA’s consultants committee, said: “These consultants aren’t just taking money from the front line, they are often drawing up policies which in themselves damage patient care.”

Dr Peter Carter, general secretary of the Royal College of Nursing, said: “We are unable to find any evidence about whether this represents good value.”

Andrew Lansley, the health secretary, said: “This lays bare the hypocrisy of Labour’s claims to have cut back on Government administration costs.”

PA Consulting group said Lord Warner’s advisory work for them did not relate to any contracts held with the DoH. Deloitte said the peer’s role as a strategic adviser ran from March to December last year.

Lord Warner said he only began advising PA Consulting in Autumn 2008, and was no longer advising four of the eight companies he has worked for since stepping down as a minister.

He added: “Provided people leave a decent period after they are in office before they take up such posts – which I did – provided they clear it with the Advisory Committee on Business Appointments, which I did, and provided they register the interest in a public document – which again I did, I don’t think it is right to stop people who were involved in Government forever from working elsewhere. I would defend to the death the right to have a free flow of labour.”

From: http://www.telegraph.co.uk/Millions-spent-on-NHS-management-consultants-with-Labour-links

A survey by the RCN found thousands of jobs were already earmarked for cuts in an attempt to slash costs.

Health trusts are planning to cut thousands of staff “by stealth” to deliver £20bn of “NHS efficiencies”, according to a survey by the Royal College of Nursing. Labour reacted by promising that there would be more jobs in the health service at the end of the next Brown administration if it wins the election.

The move comes as Gordon Brown addresses the RCN’s four-day annual conference today. More than 4,000 nurses have gathered in Bournemouth for the event, which is expected to be dominated by NHS finances.

The nurses’ union has been riled by a warning from Sir David Nicholson, the chief executive of the health service, that up to £20bn of savings will have to be found by 2014.

A survey by the RCN of 26 of the 168 English health trusts revealed that 5,600 jobs were already earmarked for cuts in an attempt to slash costs. That figure could rise to more than 36,000 in a “worst-case scenario” if the trend was replicated across all hospital trusts, said Howard Catton, head of policy at the Royal College of Nursing. The loss of posts – including redundancies and staff not being replaced if they leave or retire – could happen over the next three years, he added.

In an online survey of 287 nurses earlier this month, the RCN said hospital wards were already operating with an average of 13% fewer staff than officially needed. Nine out 10 nurses said that patient care was being compromised by short staffing.

There is little doubt that the nurses’ union, which has 400,000 members, has political clout. Last year Brown became the first prime minister to speak at the conference in its 93-year history – to a warm reception by delegates.

Although health has not been a major focus of this election campaign, the issue of NHS job cuts is an explosive one for Labour. In 2006 the then health secretary Patricia Hewitt was jeered and slow-hand-clapped by nurses as she tried to address their fears about NHS deficits.

Andrew Burnham, the health secretary, told the Guardian that savings would come from wage restraint, cutting management costs by a third, and asking “some nurses and doctors to take on different roles in different locations outside of hospitals”.

“It is unlikely that we would need fewer people in five years in the health service. Labour will ensure sufficient funding to frontline NHS services so that they do not need to make any compulsory clinical redundancies and we will ask the NHS to co-operate across organisational boundaries and work towards ensuring this basic guarantee,” he went on. “Cutting doctors, nurses and frontline staff would be costly, counterproductive and would risk a return to the kind of NHS we saw under the Tories.”

The problem for Labour is that decisions on savings are being made at a local level. The RCN points out that managers at some trusts are already openly equating efficiency savings with job cuts.

In an open letter to staff, the chief executive at Salford Royal, a foundation hospital, said: “We are about to enter a financial crisis that could ruin all that we have achieved … this means reducing costs by about £16m a year [and] providing safe standards of service with about 250 fewer people for each of the next three years.”

The market reforms that Labour implemented have made it possible for hospitals to identify savings easily. Dorset county hospital, which made 28 posts redundant in March, admitted that its strategy to “attract more patients” with 300 new staff had failed, leaving a putative black hole of £11m in next year’s budget. The hospital issued a blunt press release: “These extra patients never came and so we are left with rising costs but without the income to cover them.” .

The Conservatives say that their promise to outspend Labour on the NHS insulates them against the charge that the health service is not “safe in their hands”. They say that thousands of NHS medics will lose their jobs over the next five years under Labour’s “secret” cost-cutting plans, which would see 651 fewer doctors and 2,050 fewer nurses across England.

Disclosures made under the Freedom of Information Act at the request of the Tories show half of NHS trusts that responded were planning reductions in the numbers of full-time equivalent doctors and nurses.

The shadow health secretary, Andrew Lansley, said: “We will back the NHS. Conservatives will increase funding for the NHS each year in real terms. So instead of Labour’s cuts to doctors and nurses, we will support the recruitment of staff we need, like specialist nurses, midwives and health visitors.”

From: http://www.guardian.co.uk/politics/2010/apr/26/health-trusts-planning-job-cuts