NHS costs rise after hiring management consultants

NHS trusts that hire management consultants in order to cut costs end up spending more, research suggests.

The study led by Bristol University said health service spending on such firms doubled between 2010 and 2014.

Analysis of spending by 120 NHS trusts suggests that the more they spend on management consultants, the less efficient they became.

Every £100,000 spent on such firms was associated with extra costs of around £900, the research found – amounting to losses of around £11,000 for the average trust.

These did not include the actual spending on such firms, with the average trust spending £1.2million a year on management consultants the study found. The study, published in the journal Policy and Politics, details how NHS yearly expenditure on such consultants almost doubled from £313million in 2010 to £640million in 2014.

Researchers linked data from 120 trusts in England from 2009-10 to 201213 to measures used to track efficiency.

They said that the spending was associated with inefficiency equivalent to an average annual loss of £10,600 a year for each hospital trust. This did not include the money actually spent on consultancy, with individual trusts spending up to £5.6million per year.

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