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A delicate balance is needed to achieve value for health spending

MY colleague and Shadow Health Minister, Andrew RT Davies, wrote a cogent article in The Western Mail last week on the need for focused fiscal spending in the Welsh NHS and that spending is clinically not political lead. Andrew rightly pointed out the issues that were raised within the recently published report of Nuffield Trust on the funding and performance of the UK’s healthcare systems pre and post devolution. The report was a damning indictment on the Assembly Government’s long-term strategic approach for the Welsh NHS. The evidence is clear – that despite increases in spending per head on healthcare than England, Wales still has lower levels of crude productivity and a considerable problem with poor performance and waiting times.

As an opposition party, Welsh Conservatives have been maintained for several years that money has not been utilised effectively. For example, we have been disparaging regarding the historic debt crisis in the Welsh NHS. Hundreds of millions of pounds have been written-off through Government loans to ensure that health boards and Trusts achieve ‘operational financial balance’. We have been deeply critical of the significant amounts of public money wasted over the last 10 years on two major structural reorganisations.

However, the most recent figures I have gathered, for me goes to heart of the two major economic challenges we face in the public sector over the next decade – to improve the transparency of where taxpayers’ money is being spent and the resolute need to focus scarce public resources on frontline services.

In a recent Freedom of Information request, I have been startled by I what believe is a flagrant use of public money in the NHS. The figures show that the Government’s Health Department and Local Health Boards have spent over £18m in the last ten years employing private management consultants.

Now don’t get me wrong, I believe that the NHS should where necessary, harness specific expertise to improve performance. I believe it should work closely with academia, foster partnerships with the voluntary sector, where there is a wealth of untapped talent and resource. It should explore and encourage cross-departmental and cross-organisational secondments where specialist, technical skills are required. It should also be allowed to collaborate with the private sector where necessary. But there has to be two central core objectives – to obtain best value and to improve performance. The key indicators for the NHS have to be high quality, continually improving services, which are efficient and responsive to local need. This is something which has been sadly lacking in many areas.

High standards of governance and accountability, with effective structures and processes to govern decision-making and balanced reporting of performance to the public, are fundamental features of best value. I admit that there has been improved financial transparency in recent years in relation to management consultants. In 2006, the UK Treasury demanded that from the financial year 2007-08, all NHS summarised accounts had to have a separate disclosure of the amounts payable to external consultants in the NHS; prior to that, the costs were included in “miscellaneous expenditure”.

However, while this is a step forward on financial accountability in helping to identify where money was being spent in NHS Wales, it still does not allow us as taxpayers to know whether NHS Wales and the Assembly Government’s Department of Health are getting value for money from the contracts agreed with management consultants; and whether the expenditure has led to an improvement in the service experienced by patients.

I have already called for the Assembly Government to come forward with evidence that those effective structures and process are in place to ensure that it is making the right decisions on employing management consultants. This need not be a protracted process. If the Minister comes to the conclusion that those processes are not as robust as they should be, then she need not embark on a long consultation exercise, nor gather together the great and the good for ‘another’ government review.

Why? Because the work has been done in England.

The House of Commons Health Select Committee published a detailed report last April regarding the use of management consultants in the NHS and Department of Health. The recommendations, which have been accepted by the UK Government, are clear and straight forward to implement. The first is that the Government collect centrally lists of:

1. The management consultants employed by the Department of Health, SHAs, PCTs and acute, ambulance and mental health trusts, indicating the projects they are employed on, their duration, cost and purpose;

2. The top ten daily rates paid by each category of organisation.
And that these lists should be published annually – this will start this summer.

The second is that a sample of contracts with management consultants agreed by all categories of NHS organisation and the Department should be subject to external peer review – as they are in academia – and this should include an assessment of the value of the consultants’ output.

The current situation is clearly unsustainable in the economic climate that we now find ourselves in. There must be an even greater focus now by government and public bodies to delivering essential frontline services. We need government assurance that the new health boards can keep on top of every pound that is spent and more importantly, where it is spent.

Everything must be stringently tested for value for money. NHS Wales and the Assembly Government need to demonstrate how the use of public money has contributed to better outcomes for patients. Unless we have these assurances and unless the taxpayer is assured that the NHS can manage its finances effectively, then confidence in the system will be eroded which could prove in the long-term critically damaging for a free universal healthcare service.