NHS spent £500 million on management consultants with Labour links
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.”
One Comment so far:Posted by: Health Direct on August 11, 2010
Tags: Andrew Lansley, Bliar, BMA, Connecting for Health, DoH, labour liars, Labour shambles, nhs cash shortages, Patricia Hewitt, RCN, TaxPayers Alliance