NHS Peterborough – MP Condemns Consultancy Spending

07:28 Friday 8th July 2011
Peterborough Breakfast Show
BBC Radio Cambridgeshire

PAUL STAINTON: Millions of pounds to consultants. NHS Peterborough spent more than £1.3 million on consultants in the last year, the second highest out of all the PCTs in England, even though they had to make a £2 million reduction in running costs by April 2012. The figures have been revealed through an FOI, Freedom of Information request, submitted by medical magazine Pulse. Richard Hoey is the Editor. Morning Richard.
RICHARD HOEY: Good morning.
PAUL STAINTON: That’s a heck of a lot of cash. Tell us more.
RICHARD HOEY: It is a lot of cash. I suppose the only mitigating circumstance is that it is slightly less cash than the year before. We put out FOIs to all primary care trusts across England, to try and find out how much they were spending this year. Because they were set a really strict target, by the previous government actually, to reduce their spending on management consultants like McKinsey, Price Waterhouse Coopers, KPMG and so on, because it was felt that they were spending far too much. And what we found was that most of them were meeting this 50% target for cutting their costs. But NHS Peterborough was one of those that was doing rather less well than the average.
PAUL STAINTON: Why are all these trusts spending so much money on consultants? Because when you know you’ve got to make a £2 million reduction in spending, spending £1.3 million on asking people what they think seems a lot.
PAUL HOEY: It does. And that’s exactly the question that a lot of doctors are asking. It’s quite frustrating, because often these management consultants are paid in order to come up with a plan to perhaps reconfigure a new service, or find suggestions for efficiency savings. But what many doctors say is that actually, if you just asked us first, we have many of these answers, and we will be happy to help. That said, there are some circumstances where these kinds of plans can work, and certainly NHS Peterborough would argue that its money may potentially have paid off, because it’s hired McKinsey, I think it is, to run a big turnaround project, because it’s been in such bad financial straits.
PAUL STAINTON: But when you have to hire other people to do your job for you, it strikes me that you’re no good at it.
PAUL HOEY: Well I think there’s certainly a very strong case there. And Peterborough wasn’t doing e very good job. It was in desperate financial straits a year or so ago, and was running a deficit of £13 million. It’s a little bit less than that now, but it’s still in deficit, and it’s still one of those that’s really struggling. So yes, it’s alarming in that context to see so much money spent on consultancy fees.
PAUL STAINTON: Have they gone down across the board, the money spent on sonsultants, in other areas?
PAUL HOEY: Yes. The average across the country is I think £442,000. So that compares with more than £1 million in Peterborough. So it is doing quite significantly worse.
PAUL STAINTON: Triple the average.
PAUL HOEY: Yes, almost triple.
PAUL STAINTON: That’s amazing. Richard, thenk you for those figures. Appreciate that. The MP for North West Cambridgeshire Shailesh Vara has condemned the NHS Trust’s spend on consultants in Peterborough, and we’ll speak to him in the next hour of the show.


PAUL STAINTON: Shailesh Vara is the MP for North West Cambridgeshire. He’s with us this morning. Morning Shailesh.
SHAILSH VARA: A very good morning Paul. And a very good morning to all your listeners as well.
PAUL STAINTON: At first look, it seems a bit incredible that we’re spending so much on consultants, doesn’t it?
SHAILESH VARA: It’s incredible, it’s appalling, and it’s simply unacceptable. And it needs to be dealt with very fast by the managers who handle money with NHS Peterborough. People are entitled to be angry, and ask some seriously searching questions. NHS Peterborough has a history of bad financial management. In the year 2009/2010 they overspent their budget by nearly £30 million. And now, at a time of serious cuts, when they need to make budget savings of over £20 million, we find this unacceptable situation, where they’re the second highest spending NHS on consultants out of 38 trusts.
PAUL STAINTON: And if we’re paying a lot of people to run the PCT, as we do and have done, they’re not the right people, if we’ve got to go out and pay even more money to bring consultants in to do half the job.
SHAILESH VARA: Absolutely. This is an issue to do with management. And if management can’t do the job properly, then they should get other people. And if they are going to be using consultants, then they need to make sure that it is specific, and that the fees are agreed, rather than just an open-ended checkbook. And they need to be able to say, well OK, we need specific advice on this specific matter, and we’re going to retain somebody for two weeks, three weeks, whatever, and this is what they’re going to do, rather than simply say, right, would you like to have this job? And can you just go and have a look at it, and just send us a bill every three months, or whenever it is, and leave it at that, which appears to me that may well have been happening here. What is also unacceptable is that in other areas there are larger populations than ours, for example Leicester and Dudley. Yet they spent less on consultants. And as your previous caller said, this government last year advised all NHS trusts to cut spending on consultants by 50%. Now other trusts have managed to do that. In fact, some of them have managed to reduce expenditure by up to 70%. But in the case of Peterborough, they’ve got nowhere near the suggested 50% target. They’ve only got cuts of 18.3%. This really is unacceptable. Last week I saw some senior people at the hospital, and made my views abundantly clear. I’ll continue to do that. But I have to say that at a time when the public are being asked to tighten their belts, when I as one of the local Members of Parliament have to look people in the eye and say, I’m sorry, but times are tough out there, I think that it’s simply unacceptable that these people should operate in such a way in terms of spending public money. This is public money. Can you imagine the scene Paul? If these people who are sitting around a board table, if this was their own private company, and they were the shareholders, I suspect they wouldn’t be so generous in letting the consultants have their way, as they are here. But because it is public money, they say, well OK, we need some advice, let’s just go out and get some consultants.
PAUL STAINTON: Can you call them to book Shailesh? Very quickly, can you call NHS Peterborough to account on this?
SHAILESH VARA: Well certainly I can speak to the management. My job is to make sure that they are held to account. And I’m certainly starting the proces by speaking to you publicly. I’ve spoken to the management personally, and if people aren’t making the right decisions, then they need to be fired. And we can put public pressure on them. But certainly for my part, I represent the people of North West Cambridgeshire. The money that they pay in is the money that the hospitals (use to) operate. And I want to make sure it’s properly looked after. So yes, I am going to do all I can to make sure that our money, taxpayers’ money, is properly spent by these people.
PAUL STAINTON: Shailesh, thank you for that. NHS Peterborough sent us a statement. They said: “The Trust made a commitment to source additional expertise to produce a robust turnaround plan. NHS Peterborough is reviewing its use of consultants, and any future use must meet a strict criteria.” Your thoughts. Is it good enough to spend over £1 million on consultants, when you’re trying to save so much money?