Ministers fail to justify consultants' fees of pounds 95m Whitehall's consultants fail to justify fees of pounds 95m

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The Independent Online
Health ministers have spent pounds 95m on advice from external consultants in the past five years but are unable to say how much money the advice has saved.

Two parliamentary answers from Tom Sackville, the health minister, have revealed that while the Government increasingly turns to management consultants for advice, it has no idea how much benefit they actually provide.

The answers will cause further alarm on both sides of the House, although Tory MPs have been concerned for some time that Whitehall is spending too much on outside consultants and has become imbued with a theoretical, management-school ethos.

Management consultants, many of whom are drawn from firms based in the City of London, have been hired by the health department to advise on a wide range of issues, from NHS reforms to performance-related pay, staff morale, patients' attitudes and individual hospital projects.

Mr Sackville's answers, made to a shadow health spokesman, Alan Milburn, reveal a steady dependency on external consultants. In 1990 the Department of Health spent pounds 18.4m on consultancy advice for itself, the NHS and government health agencies. The following year, external consultants earned pounds 24.3m from health ministers. Last year the total was pounds 18.5m.

Set against these fees, Mr Sackville admitted, nobody has quantified how much cost savings that the consultants had produced.

They were used to assist in improving efficiency, the minister said, but he added: "It is not possible to assess the savings which are a direct consequence of their activity."

Mr Milburn, the Labour MP for Darlington, said yesterday that he was appalled, and that the total of pounds 95m was "the cost of building one large new NHS hospital, employing an extra 5,000 nurses, or carrying out an additional 20,000 hip replacement operations".

Instead of "feathering the nest of a few City firms", he said, ministers should invest in front-line patient services".

Mr Milburn's concerns have been echoed in senior government circles. Three months ago Kenneth Clarke, the Chancellor of the Exchequer, took the unusual step of writing to Cabinet colleagues asking them to impose tighter controls on the appointment of outside experts. Mr Clarke was worried that the hiring of consultants had become almost a reflex action for ministers, who were bringing in outside help, usually at rates far above the civil service equivalent, even for the most mundane tasks.

To discourage this, the Chancellor has been pushing for each government department to appoint a consultant watchdog to vet the appointment of external consultants.

The answers from Mr Sackville reveal that the Government has done nothing to probe the worth of management consultants - in spite of assurances made in April last year that it would do so. Then, a report from the Whitehall Efficiency Unit, headed by Sir Peter Levene, provoked a political storm when it disclosed that the Government had spent a total of pounds 565m on consultancy advice to produce a saving of just pounds 10m.

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