Consultants have had something of a hard time during the Covid pandemic, with headlines in the UK bemoaning the considerable sums paid to companies like Deloitte and Serco by the National Health Service and the Department of Health to support their efforts.

New research from the University of York finds, however, that such use of consultants has become habitual in the NHS, despite the poor record of those consultants in terms of efficiency improvements.

The researchers gathered four years worth of data from around 120 hospital trusts across England, and found that spending on consultants was strongly linked not to their actual results but whether they had been used in the past.

Poor returns

Critics have long bemoaned that the use of consultants is a waste of money in the NHS, but the researchers believe theirs is the first study to specifically analyze whether this is true.  They found that while some NHS trusts did manage to squeeze some efficiency improvements out of using consultants, they were very much the exception rather than the norm.

Rather than relying on strong performance in the past, the use of consultants seems wholly dependent on whether the consultants were used at all, even though this worsened efficiency levels by up to 8%.

“Continually hiring consultants is certainly not a result of a shortage or failure of management because the biggest users are those trusts with relatively more managers,” the researchers say. “While it seems unlikely that clients knowingly bring inefficiencies in through consultancy use, that is what they seem to be doing and inflating demand at the same time.”

Bad habits

The researchers suggest that managers in the NHS may be seduced by the high status of the consultancy firms, with the constancies engaging in highly effective promotional activity.

“More concretely, there is the appeal of having new and instant resources available who will rarely challenge the ‘hand that feeds them’,” the researchers continue.

The findings have clear implications for how consultancies should be used, and indeed managed.  It’s evident, for instance, that there is no apparent measure in place to gauge the effectiveness of the consultancies or to determine the value for money they provide.  The past success, equally, doesn’t seem to be a factor in the re-hiring of consultants again and again.  This reflects ongoing concerns about the transparency and effectiveness of procurement across the whole public sector.

The authors also argue that more could be done to improve internal capabilities, and cite the recent development of the “Crown Consultancy Services” as a furtive attempt to do that.  The apparent habit of hiring consultants is something that they are keen to explore in more depth, however.

“Given financial constraints facing the NHS, an obvious question is whether it is appropriate to continue using external consulting advice at the current level,” they conclude. “This study highlights the need for organisations such as NHS trusts and their masters to conduct rigorous evaluations of the potential benefits and especially the risks of using external management consultants and to adopt a genuine focus on organising alternatives and kicking the habit.”