NHS spend 7 billion pounds of taxpayer's money on 'private consultants'

And it's not medical consultants we are talking about

More than 7 billion pounds [Yes. That's billions, not millions] of taxpayers' money was lavished on private consultants in the public services over the last three years - thanks to soaring costs in the NHS. Spending on consultants in the Health Service has increased 18 fold in just two years, from 31million in 2004 to a staggering 578m in the 12 months to April - partly thanks to the spiralling costs of the new NHS computer system. That raised the total bill for consultants in the public services to 2.8bn last year - a rise of a third over the last two years.

The National Audit Office warned there is no evidence at all that taxpapyers have got value for money because Whitehall departments keep such poor records. A hard hitting report by the government spending watchdog found that ministers could save more than 1billion over three years if they put in place even basic controls to cut the number of consultants and get better value from their contracts.

The company cashing in the most is computer firm IBM, with contracts worth 275m pounds last year, while Accenture - the management company who have worked for Labour since before the 1997 election - raked in 175m. PA Consulting, who are presiding over the controversial ID card scheme, pocketed 102million last year.

The report slams government departments for paying consultants millions on a daily 'time and materials' rate which encourages them to spin out contracts to milk money from the public purse, rather making payments dependent on delivering successful projects. The worst offender is the Department of Education and Skills, which receives four 'red lights' for its failure to get a grip on consultant spending. After the NHS, the biggest slice of the bill comes from local government, where consultants earned 386m last year. The Department for International Development, despite being a small ministry, ran up a gigantic bill of 255m. The Ministry of Defence spent 213m and the Environment department 160m.

Among the contracts singled out for criticism is the Home Office's ID cards project, where more than 2m a month was being funnelled to PA Consulting last year. The report complains that the department rather than the consultants 'bear the costs for increases in project duration', which have exceeded original estimates. The NAO concluded that most departments do not bother to 'make a proper assessment of whether internal resources could have been used instead of consultants' or 'collect adequate information on their use of consultants'. Crucially their report said that departments do not talk to each other about which consulting firms and partners at those firms do a good job, nor do they make sure consultants train up civil servants to do the job once they have left. It concludes: 'Fewer than half of central government organisations collect information on how the consultants have performed against what they were intended to do.'

Keith Davis, director of the NAO efficiency centre which compiled the report, said: 'The way that Government is managing consultants doesn't represent value for money. Part of the problem is there is no clear information.' Edward Leigh, chairman of the Public Accounts Committee, said: 'Today's report from the NAO confirms what many of us have long suspected: the external consultancy gravy train continues full steam ahead, courtesy if the public purse. 'In the past three years, 7.3bn of taxpayers' money has gone to big consultancy firms. Too often departments hand over a signed cheque to consultants without first looking to see what skills they have in-house. 'Perhaps the most damning finding is that, time and again, departments fail to keep an eye on how these companies perform or if they are delivering.'

Sir John Bourn, head of the National Audit Office, branded progress in government 'disappointing'. He said: 'Departments need to think ahead about what skills they should have, so they don't have to rely on consultants year after year. Peter Hill, chief executive of the Management Consultancies Association said: 'The increase in the use of management consultants is against a background of unprecedented public sector reform which requires skills and competency not available in sufficient numbers in the public sector.' CBI director of public services Dr Neil Bentley said: 'Consultants offer expertise and experience often not found in the public sector, but government departments need to make a clear business case for using them if the taxpayer is to get value for money. 'As the NAO rightly suggests, this does not always happen.'

Source

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For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation. Both Australia and Sweden have large private sector health systems with government reimbursement for privately-provided services so can a purely private system with some level of government reimbursement or insurance for the poor be so hard to do?

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