The need for consultancy

Management consultancy seems never far from the headlines. After a remarkable decade with global consultancy markets recording explosive growth of between 10-15 per cent per year, year on year, (higher than the global economy), consultancy has a prominent and sometimes controversial place in the UK Economy.
Government spending on consultants has rocketed to £2.5bn at the same time as Whitehall tries to cut 84,000 civil service jobs and 320bn in the public sector in line with the Gershon efficiency review. Figures from the Office of Government Commerce showed that spending on management consultants increased by 42 per cent last year from £1.76bn in 2003/04 to £2.5bn, the equivalent of a penny in the pound on income tax and enough to build 150 new hospitals or employ 100,000 nurses.

Consultancy in the NHS
Within this the National Health Service now spends more on consultancy than the entire UK manufacturing industry, and is the fourth largest market for consultants, a recent survey on consultancy by Accountancy Age shows.
But the use of consultancy by the National Health Service can be a volatile market with similar practices having very different results and this is especially so over the last year. The withdrawal by Accenture from the NHS IT programme is an example and the size of the contracts being entered into is typically increasing. Furthermore, many practices are changing and repositioning. Both these factors can create a changing and uncertain position.
Another major factor affecting the NHS consultancy market is the re-organisation of the various Health Trusts and the string of resulting mergers. This wide ranging re-organisation saw 303 primary care trusts in England joined to make 152 larger trusts.
While the objective is efficiency and improved patient care, studies by the British Medical Journal (BMJ) have shown that the merger of NHS trusts can often have a negative effect on the delivery of NHS services, cause delays to service improvements and fails to deliver promised cash savings. Senior managers involved in mergers often underestimate the timescale and amount of effort involved in the process of a merger and the planned service improvements can often be delayed by up to 18 months after the merger has taken place.

Dealing with change
Increasingly the NHS has turned to consultants for support in dealing with this unprecedented rate and scale of change. At the same time expenditure is being closely watched. It is therefore important to be able to create and deliver value, to be able to identify it and indeed measure it. A process for evaluating performance and delivery needs to be considered as part of the specification development. Measures must be clear and should demonstrate the relevance to delivery outcomes. Reviews at the end of the consultancy assignment are crucial to ensure that the value and benefit expected have been achieved.
This is most important because the range of new challenges facing the NHS is complex and arguably potentially overwhelming. A recent survey conducted for the Institute of Management Consultancy Health Group by IMC Health Group Chairman, Kevin Pritchard, identified eight major policy initiatives that had either changed or been introduced recently, all of which would absorb significant management time and resource within the new trust structures. This was in addition to the pressures facing managers in bringing together and harmonising the different cultures and possibly different working practices. 

The following key reforms, and issues (or challenges) have been identified:

  • Payment by results
  • Introduction of maximum 18 week wait for non emergency operations
  • Switching the treatment of patients with long term conditions from a hospital environment to treatment closer to home
  • General practice commissioning of health services
  • National plan for IT to computerise patient records
  • Project management of major procurements from the private sector
  • Financial turnaround and mergers
  • Major hospital building projects in partnership with the private sector.

Need for consultancy
This on top of the recent mergers is a complex range of issues and there is both scope and demand for more consultancy to help with this. Strategy, change and project management skills are always in high demand in an environment where policy change is relentless, but the scope of IT developments means continuing work for larger suppliers, while the change management requirements of the various mergers will require a large volume of smaller specialist consultancy.
Keeping abreast of the policy changes and enabling members to take advantage of the opportunities presented is a service that the IMC sees as essential. Providing a forum for members to share and discuss best practice is a popular way to do this.
To this end an IMC “Health” members group has been set up which will be for those members with an interest in the health and pharmaceutical area. Plans envisage that the group will meet once a quarter initially in London to present the latest news and views on what is happening in the health sector. In addition a web board facility has been set for more frequent exchange of comment.
A current trend encouraged by government is for individual consultants to band together to form consortia able to compete for elements of larger contracts. IMC sees this as important and it is hoped that an active group of members will encourage best practice and develop new avenues of business, as well as delivering value to the NHS.
Delivering value to the NHS will clearly be the focus of relationships between the NHS and consultants for the foreseeable future. Given the keen public and media interest in NHS efficiency and effectiveness, and with increasingly tight financial constraints, central and local government have a complex set of challenges around choice and quality of service, measurable efficiencies, moving resource into front line services, new technology and ensuring that what is delivered meets present day demands.
There has been a lot of concern expressed publicly that consultants working in the public sector have not been sufficiently assessed. The Office of Government Commerce have responded to this concern by working with senior members of government departments and representatives from a range of consultancies to develop a best practice guide. This is intended to support both consultants and purchasers in ensuring delivery of value from public sector consultancy assignments.
Professionalism in delivery of services is vital. Therefore, management consultants must ensure professional standards are practiced in their assignments and throughout the Management Consultancy profession.

Unlike more established professions such as law, accountancy, medicine and architecture, consultants rely little on making their profession closed through requirements of qualifications. Nor do they have the same concern as the other professions about accreditation and regulation. Management consultancy differs significantly from the other professions as it is very broad and varied. Also, its products change more or less constantly and so it has evolved differently.
However, there is a move by consultants to regulate themselves. There is a recognition that they need to establish some third party obligations and guarantee of quality above reputation and brand.
The professional body, IMC, is meeting this need through providing the services of a well regarded professional body to the sector. These include providing the framework for thought leadership in consultancy, establishing what constitutes the esoteric, fragmented and perishable knowledge base of the profession.
IMC also engages regularly with a large group of procurement professionals involving them in the development of knowledge about and practice of consultancy. This process helps IMC provide and maintain its leading qualifications in consultancy aimed at developing the knowledge consultants need when they start practicing. IMC are in the process of developing higher level qualifications for more experienced consultants.
It is difficult for purchasers of consultancy to choose a consultant if they have no external measure of professionalism and competence. In other professions the uncertainty and risk in choosing a firm has been reduced through entry barriers to the profession and quality control measures relating to competence imposed by the professional body which then enforces them. In consultancy the trend is to ever more rules based approaches to procurement being used in an attempt to de-risk consultancy.
IMC has almost 140 practices of all sizes in membership. They sign up to working professionally and about 20 of them have Premier Practice status. This means that they understand the need for external recognition of their approach to continuing professional development and sign up to ensuring their consultants are assessed for the CMC. This means they can be less bureaucratic and can offer an exciting and well supported environment to their consultants.
IMC and its work, coupled to the professionalism of its member firms and individuals, is a key element in ensuring that value is embedded. This contributes to providing value for the NHS and an assurance of cost effectiveness for the public.  The recent spate of changes within the NHS are unlikely to reduce the demand for consultancy, but the work of IMC and many other bodies and partners can at least help to develop a value culture and ensure the continued efficiency of the service.

For more information