Management consultants could be leading to NHS inefficiencies, study says


Management consultants in the NHS may actually be leading to inefficiencies, a new study has found.

Money spent on management consultants seems to have the reverse effect to what is intended, researchers said.

After examining data on 120 hospital trusts in England between 2009/10 and 2012/13, they found that an average of £1.2 million a year was spent on consultants per trust.

The study, published in the journal Policy and Politics, details how NHS yearly expenditure on management consultants almost doubled from £313 million in 2010 to £640 million in 2014.

Study finds link between NHS consulting expenditure and organisational inefficiency (PA)

The experts from the universities of Bristol, Seville and Warwick Business School linked data from 120 hospital trusts in England to two standardised indicators of efficiency.

They found that there was a relationship between consulting expenditure and organisational inefficiency.

They said that spending on management consultants was associated with inefficiency equivalent to an average annual loss of £10,600 a year for each hospital trust.

But this does not take into account the money spent on consulting, which ranged from zero to £5.6 million per year.

Although some trusts did experience efficiency improvements, these were the exception rather than the norm, the researchers said.

The authors said that more research is needed to explore the link but they questioned whether it is "appropriate" for the health service to continue using external consulting advice at its current level.

Andrew Sturdy, professor in management at the University of Bristol, said: "Our research has clearly shown that management consultants are not only failing to improve efficiency in the NHS but, in most cases, making the situation worse.

"Data shows that it's a system-wide problem. This is money which, many argue, could be better spent on medical services or internal management expertise.

"From the study data we can only speculate on what lies behind these findings. One possibility is that consulting projects are highly disruptive, especially if the demand for them has been generated artificially by sophisticated selling, backstage deal-making and revolving doors between politicians, regulators, healthcare managers and civil servants."

Professor Ian Kirkpatrick, from Warwick Business School, added: "Given financial constraints facing the NHS, an obvious question is whether it is appropriate to continue using external consulting advice at the current level.

"This study highlights the need for organisations to be more circumspect in decisions about whether and how to use management consultants."

An NHS Improvement spokesman said: "We are working with all trusts on reducing their costs, which includes spending less on management consultants; and have had some success.

"Since 2013, trusts have reduced their spending on management consultants by £150 million, which is a significant improvement on the past.

"In future, we will continue to work with trusts on keeping their consultancy spending to a minimum, and on commissioning it better."