Improving management consultancy use in the NHS

Researchers set to work with NHS partners to help improve practice, following findings of inefficient use of external management consultants.

Research by Professors Andrew Sturdy and Gianluca Veronesi and Dr Andrea Gibbons

Use of external consultants within the public sector is growing, but their role is often controversial. The NHS is a prime example, with trusts in England each spending an average of £1.2 million on external consultancy fees per year.

The team from the University of Bristol worked with colleagues from the Universities of York and Seville to examine the effectiveness and governance of external management consultant use within the NHS.

Their findings have shown that, rather than creating efficiencies, greater spending on external management consultants by NHS trusts often led to increased inefficiency, between 3.5% to 8%. It also inflated further demand for external consultants, raising the possibility of ‘over-use’.

Also, surprisingly, external consultants did not always seem to be a substitute for in-house resources, with usage found to be highest in trusts with more managers. This was less the case where there were higher levels of internal consultants which implies that building internal specialist capability could reduce spending on external consultants.

Prior to this research, there was a lack of clarity around the outcomes of external consultant use. Even now, both consultants and clients are sometimes motivated to protect their reputations and as a result, failed projects can sometimes be buried to prevent negative perceptions and yet fees are still paid.

From a range of different studies, including at national and local levels, the research has raised serious questions about accountability, performance and, ultimately, value for money. It suggests that existing approaches to governing external consultants need to be strengthened and that alternatives should be sought and implemented. This is now the focus for the team.

With funding from Research England (QR Policy Support Fund), Professor Sturdy and colleagues will work with the NHS and consultancy partners, using their findings to help improve the use of NHS resources through new practices and sharing knowledge. Their continuing research will also compare the efficiency of internal verses external specialists to help inform practice, either improving use of external consultants or developing internal resources.

This research and the impact project associated with it have the potential to create significant financial savings for the NHS, freeing up funding for them to spend in other areas, improving healthcare delivery.