McKinsey has a very long history of, er, 'reforming' the NHS, some it, such as Chelsea Clinton being part of McKinsey team 'reforming' A & E in Southport would be hilarious, were not the consequences so serious.

As a one-time regular traveller on the totally inadequate road between Southport and Ormskirk I was utterly aghast when it was decided to merge their A & E's some years ago.

iaindale.blogspot

Even the Torygraph seems to have cottoned on to the fact that there's something rotten about New Labour's love affair with US management-speak.

Needless to say it's that lucrative revolving door again!

Telegraph

It seems to have started - surprise! - with Blair and Lord Birt. Again, this one would be comical but for its consequences:

Lord Birt, with his bland, technocratic face and mangled ‘Birtspeak’, has provided the popular image of the management consultant ever since he became Director General of the BBC in 1992.

He introduced internal market reforms based on ideas developed by the consultancy firm McKinsey ...

Ignoring what had plainly been an at best ambiguous episode in the BBC’s history, Tony Blair gave Birt a job in Downing Street.

His brief was ‘blue-skies thinking’ which meant that he could upset any department of government more or less at random. Since he was also a part-time consultant with McKinsey, the clash of interest was just too glaring. But, again, the problem didn’t seem to have struck Blair ...

bryanappleyard.com

Then there's the famour 'hit teams' that aimed to, er, 'turn round' failing hospitals, like Mid Sfaffs.

Health Direct

Who needs the Tories back? They never left.

Guardian04 September 2009

NHS reforms: American consultancy McKinsey in conflict-of-interest row

A global consultancy firm seeking to profit out of the fallout from the shake-up to the NHS is being paid £250,000 a year by the government for advice on the transition towards health secretary Andrew Lansley's vision of the service.

The American firm, McKinsey Inc, with estimated revenues of £4.1bn a year, has been advising the Department of Health on how best to manage the radical changes since March.

McKinsey is also one of a group of private consultants that have united to provide paid-for advice to GPs as they prepare for life after the reforms ...

McKinsey's advisory services emerged in a freedom of information release published on the department's website.

The job description says: "Consultancy services in support of the NHS transition programme".

The company was one of 57 external "organisation and change" management consultants paid almost £5.5m by the government in the last financial year ...

Gdn  05 Nov 2011    Corporate State Log    NHS 'Reforms'    

Departments spent £1bn on consultants

Central government departments spent more than £1bn on consultants and temporary staff in 2009-10, a report by the Commons spending watchdog says.

It said departments should negotiate more fixed price contracts and develop "core" skills among their own staff.

And it warned "uninformed" cuts to spending and training could end up costing more in the long term ...

The report by the public accounts committee says that, in 2009-10, departments spent £789m on consultants and an estimated £215m on interim managers.

In 2006-7 £904m was spent on consultants - that dropped by £126m in 2007-8.

The report said new measures brought in by the coalition to control the use of consultants seemed to be having some effect but some departments' spending was "unacceptable" ...

BBC NEWS  21 Dec 2010    Cutting the deficit ... not!

Whitehall consultant costs are crazy

Ministers spent £1bn on wasteful contracts, says audit office

The government spent more than £1bn on consultants and temporary staff last year, hiring them on wasteful contracts and failing to manage them properly, according to the spending watchdog.

Although spending on consultants fell slightly in the last four years, the National Audit Office concludes the government is not getting value for money because it does not keep tabs on what they do once they are hired.

Nearly 80% of the Treasury's staffing costs now go on consultants and some Whitehall departments have drastically increased their reliance on external advisers in recent years.

Civil servants are failing to define what they want from consultants, measure whether they provide it or hold them to account when they fail, the NA Office report says.

The government is still too reliant on consultants to provide basic work, which could be more cheaply carried out in-house.

In addition to the £1bn bill in Whitehall, quangos spend an estimated £700m more on consultants.

The NAO's unusually blunt assessment will be seized upon by the coalition as justification for their freeze on the hiring of consultants.

It identifies the departments most reliant on consultants. Last year the Department of Health spent £108m on consultants, transport spent £96m and education £74m.

Nearly 80% of the Treasury's staffing costs were on consultants (though 90% of this was charged to financial institutions), 70% of Transport's staff costs were spent on consultants and 50% of the Department for Education's.

Guardian  14 Oct 2010    

Councils 'could cut 500,000 jobs and not harm services'

The UK's councils could do the same amount of work with 500,000 fewer staff if they matched the productivity of private firms, a report has claimed.

Junior staff in local authorities were, on average, productive only 32% of the time during working hours, said management consultancy Knox D'Arcy.

It said this compared with an average of 44% in the private sector ...

BBC NEWS  20 Aug 2010    Corporate Public Services    Reserve Army

Council workers are unproductive

Council staff waste two-thirds of working day

Whitehall spending on consultants rises

The Treasury increased spending by 126%, up to £54.6 million in 2008-09 from £24.1 million the year before - with the rise mostly going on consultants brought in to assist with the bank bailout.

The bill at the Home Office rose by almost 46%, from £96 million to £140 million ...

Costs at the Department for Work and Pensions went up by almost £19 million (24.5%), from £76.5 million to £95.2 million ...

The Department for Children, Schools and families increased its spending on consultants and external expert advisers by 12.9%, from £62 million to £70 million ...

The total bill so far for 19 Government departments is £873,645,197 in 2008-09, up £22,651,872 from the previous year. But both the Department of Energy and Climate Change and Department for Environment, Food and Rural affairs are yet to make public their spending for last year, meaning the total cost is likely to rise even higher ...

Telegraph  22 Feb 2010

The Treasury is to be rebuked this week by the Whitehall watchdog for spending more than £80m on private consultants to advise them on the bailout of HBOS and the Royal Bank of Scotland.

The National Audit Office (NAO) report will reveal on Friday that payouts to consultants for the rescue package for the two banks is higher than the £70m spent saving Northern Rock the previous year ...

The NAO investigation will reveal that City firms, including Goldman Sachs, which is expected to pay out huge bonuses in the new year, pocketed more than £150m from the taxpayer in advising the Treasury how to save other banks from going bust. The report will also suggest the government employs specialist staff capable of carrying out the work in-house, to avoid future payments.

The NAO is particularly angry that the Treasury failed to learn from the Northern Rock bailout in 2007, when it signed a deal with Goldman Sachs – which included an ill-defined success fee – and allowed the City firm to keep secret how they calculated the rescue package ...

Edward Leigh has already written to complain to the chancellor, Alistair Darling, for breaking parliamentary convention to inform the committee of the Bank of England's actions. The government said the information was too market-sensitive to disclose. Leigh will reject this explanation on the grounds that the information would have remained secret until the audit office report was published.

Revelations about the fees paid to bankers have angered civil service unions. Mark Serwotka, general secretary of the Public and Commercial Services Union said: "It would appear that the City enjoys a win-win situation. Not only has the taxpayer spent billions to bailout the banks, they have had to pay millions to consultants in the City for the privilege.

"The government talks about cuts and so-called efficiencies to tackle public debt, yet continues to give consultants a licence to print money. Rather than cutting public services, the government should be cutting the £2bn spent on consultants each year and the £100bn of uncollected, avoided and evaded tax." ...

Guardian  01 December 2009

The government says it has rejected advice from management consultants to cut the NHS workforce in England by 10% over the next five years.

The plans to close 137,000 clinical and admin posts were proposed by McKinsey and Company to save £20bn by 2014.

The consultants also said a recruitment freeze and early retirement programme should be established, the Health Service Journal reported.

But the Department of Health said many services needed more staff, not fewer ...

The health service budget is due to rise by more than 5% each year until 2011 ...

BBC NEWS  03 September 2009

The report in HSJ provoked huge interest in the mainstream media, but McKinsey's consultancy role in the NHS goes back to at least 2005, probably earlier, though I have found no reported predating December 2005.

The Department of Health has been told the NHS in England will need to slash its workforce by 137,000 if it is to achieve its planned £20bn savings by 2014, HSJ can exclusively reveal.

This would mean the NHS losing 10 per cent of its workforce. The estimate was given to the DH in a confidential report commissioned from the consultancy firm McKinsey and Company, and seen by HSJ.

Although the DH has said the report was “purely advice and does not constitute government policy”, it bears the department’s logo and has been disseminated among senior NHS managers.

Proposed cuts

30,800 non-clinical posts, saving £600m

£3bn - saving potential of increasing staff productivity in NHS hospitals

£1.9bn - savings projected by cutting external contracts and supply costs such as waste and food

£1.3bn - saved by cutting unneeded appointments and procedures

£8.3bn - estimated value of hospital estates which could be freed up and sold

The McKinsey report makes clear the cuts will need to be felt as much among clinical staff as administrators.

Based on its analysis of different staff group efficiencies, it says the cut required to full time equivalents for an NHS hospital with a clinical staff of 300 would be: two consultants, one registrar, 10 nurses, 10 healthcare assistants, three allied health professionals and eight non-clinical staff.

The report recommends a range of “potential actions in the next six months” that should be considered. These include: a recruitment freeze starting in the next two years; a reduction in medical school places starting in October, to avoid oversupply in five years; and an early retirement programme “to be implemented in the next two years” to encourage older GPs and community nurses to make way for “new blood/talent” ...

HSJ asked the DH whether the report - which earlier this year McKinsey won a competitive contract to write - concurred with the department’s own analysis and policy.

In response health minister Mike O’Brien played down its significance. He said: “Advisers advise but minsters will decide after taking a range of advice.”

He added: “The McKinsey work ... is not in any sense an NHS plan of action. They are just making some suggestions which will be looked at with many other ideas.”

NHS Confederation policy director Nigel Edwards said some proposals looked at odds with current policy:

“We’ve just spent a fortune on stopping GPs retiring. Isn’t the rest of the strategy to shift care out of hospitals and into primary care?”

He added that early retirement plans would take a long time to yield any savings, unless McKinsey was recommending the DH “reneges” on the NHS pension scheme.

Health Service Journal 03 September, 2009

tumblehome
03 Sep 09, 10:42am

Surely the real question was why a so-called Labour government would ever employ a Taylorist consultancy like McKinsey in the first place. The UK has been a leader in management theory and has plenty of consultancies attuned to UK culture. Why employ a US company which promotes what is in effect an alien management culture?

A lot of what is wrong with Government seems to be traceable to the (apparent) McKinsey obsession with box-ticking target achievement. Once you have a target-driven mentality, achieving the target becomes more important than doing the job. Yet this obvious point, made by plenty of other management consultancies, seems to have passed the Government by.

Payment by achieving easily measured tickbox targets or by number of reporting staff is a terrible way to run Government.

It's worth remembering that the UK had plenty of businesses running on quality management systems and the Oliver Wight operational excellence system when the US was still going round sticking "TQM" stickers around HQ and claiming to have advanced management systems in place.

Unfortunately the next Government is likely to continue the trend: William Hague is influential, and ex-McKinsey.

dowalker
03 Sep 09, 11:19am

To see the damage McKinsey advice has already done to a British institution, glance back to the BBC circa 1996-1999.

They suggested a broadcast/production split, which caused more waste and inefficiency than leaving things as they'd been before. It took Greg Dyke most of his tenure to remove this structure, thereby allowing producers to make programmes more easily again. Even now, though, much of the BBCs bloated management results from the remnants of this structure.

The fact is, management consultancy isn't worth the verbose paperwork it's written on. If a manager can't do their job, they shouldn't be doing it.

More to the point, if management consultancy doesn't understand what it's consulting on - you'll get another BBC infrastructural mess, which will take another decade to clear up.

Alas, most of our political elite enter the McKinsey revolving door at some point - allowing the Mafia-like tentacles of this company to wrap itself around and strangle even more of our public institutions.

Guardian 03 September 2009

NHS advised to lose one in 10 workers

NHS 'should sack 137,000 of its staff'

NHS 'faces huge budget shortfall'

If they win the next election, HSJ understands the Conservatives are likely to require all GP practices to become practice based commissioners. Most of their commissioning functions would be performed through federations of GP practices operating as consortiums. This would result in a reduction in the commissioning role of PCTs in some areas, potentially leading to a raft of mergers.

The Conservatives would welcome such mergers as part of an organic process but stress they would be voluntary. They hope to encourage more GPs to take up commissioning by turning the currently indicative budgets into real cash budgets.

Shadow health secretary Andrew Lansley told HSJ this would give practices “real opportunities to save and reinvest, and real control over contracts”. However, he was clear that any underspends would remain ringfenced for patient care, not practice profits.

Mr Lansley said this would combine “the decision-taking responsibility for where and how patients are treated with the finances which are necessary to support it”.

David Furness, health project leader at the Social Market Foundation think tank, said the implications of an enhanced role for practice based commissioning were “much more significant than has been [previously] discussed” ...

Sources within the NHS, who have been asked to advise the Conservatives on the development of their health policy, said they thought the party would ideally like to see strategic health authorities and PCTs merged to create maybe 40 strategic commissioning bodies, organised around city regions.

That would resolve the perceived problem of PCTs being “too small” to negotiate good value from large acute hospitals ...

Health Service Journal  27 August 2009

The Department of Health has spent almost £500 million on management consultants, including deals with firms which have hired senior Labour figures and high ranking civil servants, an investigation has revealed.

The disclosure of more than 100 contracts worth a total of £470 million last night engulfed the Government in accusations of "cronyism".

Among those recruited by the favoured firms are a former health minister, an ex-adviser to the health secretary and a senior Whitehall official responsible for encouraging private sector involvement in the NHS.

Doctors' and nurses' leaders expressed concern over the use of resources which could have paid for more than 60,000 hip operations, or the annual salary of 22,000 nurses.

Critics also said the revelations indicated that the "revolving door" between the Government and its favourite consultant firms was spinning ever more quickly, with former senior politicians, officials and advisers linked to companies profiting directly from the policies they had introduced.

Lord Warner, a Labour peer, who was a health minister until December 2006, now acts as an adviser to PA Consulting group, which received £4.9 million from the Department of Health (DoH) in 2007/8.

Until last December he also advised Deloitte, which received almost £3 million in the same year.

Since resigning as a minister in 2006, the peer has also registered interests working for six other health care, technology and IT firms.

Matthew Swindells, policy adviser to then health secretary Patricia Hewitt between 2005 and 2007, who was earning £195,000 at the DoH, is now group managing director for health at Tribal, which earned more than £2 million from the department in 2007/8 ...

Other figures to have crossed from Government to private sector firms which won the management consultancy contracts include Sir Michael Barber, who was Tony Blair's chief adviser on delivery – focusing on education and health – from 2001 to 2005.

Since September 2005 Sir Michael has been a partner at McKinsey, which was paid £9 million for management consultancy services to the DoH in 2007/8 ...

A spokesman for the DoH said consultants were necessary to supplement the skills of its workforce.

Telegraph  22 August 2009

Top

Lord Darzi and Other Consultancy Logs

Lord Ara Darzi is a very busy man. He’s a colorectal surgeon, a junior Health Minister, he’s produced thoroughly nasty proposals to privatise big chunks of the NHS across England (‘Our NHS, Our Future’), and he’s written comprehensive plans to restructure healthcare across London. That’s assuming that Lord Darzi has done the work himself, of course; the word ‘McKinsey’ features remarkably prominently in the list of contributors to the London plans. McKinsey is the private consultancy firm now crawling all over the NHS ...

Cutting through the Darzi waffle

Private companies must be made to reveal NHS profits

Health campaigners have condemned a major NHS consultation exercise in Kent and Medway as a sham -- and they say a leaked document proves health bosses are out to bamboozle the public. There are plans to demonstrate about it at a Strategic Health Authority 'health summit' next week.

Under the slogan 'Creating an NHS Fit for the Future', local NHS managers are conducting the most far-reaching review of health services in Kent since the NHS began, in 1948. ...

Behind the scenes, private consultancy firm McKinsey, who act as the shock troops of the Department of Health, have already been at work to begin identifying which hospital services in Kent and Medway must be lost. But NHS bosses are saying nothing publicly about this work -- or how much McKinsey were paid for it.

We are promised more services that will be delivered, somehow or other, 'in the community' -- yet cottage hospitals and other community services are actually being cut as a result of the financial turmoil in the NHS ...

NHS CONSULTATION SLAMMED AS A "SHAM" AS CUTS ARE BULLDOZED THROUGH TO DODGE MEDIA SPOTLIGHT Friday 24th November 2006 09:07

It seems that inveterate hospital shutter Nurse Patricia Hewitt is enlisting the support of Chelsea Clinton to shut the A&E at Southport Hospital. The former First Daughter was part of a McKinsey management consultancy team to visit Warrington recently to meet Southport NHS Trust bureaucrats to discuss how best to cut their costs. Closing the A&E and transferring it to Ormskirk was high on their list of subjects to discuss. It's not clear how many nursing positions will be lost if the move goes ahead, but we all know the Clintons are expert in 'blowing' jobs! I don't know if Chelsea and her colleagues will be invited back, but it would be interesting to know how much McKinseys are being paid to help "save" the NHS money. A written PQ perhaps, someone?

Chelsea Clinton Advises NHS on Hospital Closures

BMA chair Hamish Meldrum has urged new health secretary Andy Burnham to put a stop to the Government's controversial market-led reform of the NHS.

Speaking at the BMA's Annual Representative Meeting in Liverpool, Dr Meldrum appealed to the secretary of state to abandon the Government's obsession with competition, and called for an end the 'wasteful bureacracy' of the market.

He said the looming financial hardship facing the NHS required a total rethink in priorities, and said there had never been a more pertinent time for the Government to review its commercialisation agenda.

Dr Meldrum also attacked the huge sums spent on external management consultants in the health service, as recently revealed by Pulse, and urged all delegates to sign up to the BMA's anti-commercialisation campaign in solidarity.

'We must look at how we can use scarce resources more efficiently, where we can cut out waste and unnecessary expense,' he said. 'The best advice of all Andy? End the ludicrous, divisive, expensive experiment of the market in healthcare in England.'

'Never has there been a better time to abandon the wasteful bureaucracy of the market. Never has there been a better time for the various parts of the NHS to cooperate rather than compete.'

Dr Meldrum added: 'You can cut out the waste and inefficiency of hiring expensive management consultants to try and solve the ills of the NHS. We can tell you what's wrong with the system and we come a damn sign cheaper than McKinsey's or KPMG.'

Meldrum urges Goverment to end market-led NHS reforms

29 Jun 2009

Lord Birt, with his bland, technocratic face and mangled ‘Birtspeak’, has provided the popular image of the management consultant ever since he became Director General of the BBC in 1992. He introduced internal market reforms based on ideas developed by the consultancy firm McKinsey. He did some good but left behind a smouldering mass of bitterness and a huge bill payable to the consultants. Ignoring what had plainly been an at best ambiguous episode in the BBC’s history, Tony Blair gave Birt a job in Downing Street. His brief was ‘blue-skies thinking’which meant that he could upset any department of government more or less at random. Since he was also a part-time consultant with McKinsey, the clash of interest was just too glaring. But, again, the problem didn’t seem to have struck Blair ...

The Catastrophe of Management Consultancy

26th November 2006

Emergency turn-around teams are to be sent into the worst performing hospitals in England to tackle the NHS's predicted £623 million budget deficit. Announcing the move, Patricia Hewitt, the Health Secretary, said the teams were highly experienced in solving financial crises and management problems in the health service. Health Direct warns that these "hit teams" will be extremely expensive as they are consultants from the private sector. But these experts are not from any organisations with any medical specialiality but bean counters from McKinsey and PwC ...

Hit teams to go into hospitals in deficit - which will only increase their cash shortages

07 12 05

... the idea of making the NHS a more independent agency, free — this concept’s proponents would argue — from inappropriate political meddling, is once again attracting attention. Past inquiries rejected this option. But with public disquiet about the NHS continuing despite the extra money invested, the establishment of an independent NHS board has once again gained currency.

One of this approach’s most influential advocates has been Steve Dewar, director of funding and development at the King’s Fund. In 2003 he wrote a report called “Government and the NHS: time for a new relationship?”. This argued that establishing an independent “agency type” board at the head of the NHS would not disenfranchise politicians or weaken their legitimate role as public health guardians. Rather, it would allow them a proper place, focused on strategic rather than managerial governance. Steve Dewar restated this case in November of this year, at a breakfast discussion held at the King’s Fund’s London headquarters.

His fellow speakers at this occasion were Paul Corrigan, the Prime Minister’s special adviser on health, and Nicolaus Henke, head of health practice at the consultants McKinsey. (A report from McKinsey preceded last year’s departure of chief executive Nigel Crisp from the Department of Health, and opened the way to the subsequent reorganisation of the NHS leadership and functioning in England.) ...

Would an independent NHS board put the politicians in their place?

02 12 06

Sir Nigel also seem to have lost the confidence of his political masters and his senior staff; Patricia Hewitt's decision to call in management consultants from McKinsey to advise on the structure of the health department was hardly a vote of confidence in Sir Nigel says the Times ...

Sir Nigel Resigns 15th March 2006

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