Anger at selection of firm that advised huge NHS job cuts

UNIONS have reacted with anger to the Assembly Government’s decision to appoint a management consultancy which recommended swingeing job cuts in the NHS in England.

McKinsey and Co is working on a five-year strategic plan for the Welsh NHS. Earlier this year it suggested the NHS in England would have to shed around 137,000 jobs to meet planned efficiency savings of £20bn.

The recommendation was rejected by Labour Health Ministers at Westminster.

Dave Galligan, head of health for Unison in Wales, said: “We recognise that the Assembly Government faces tight budgets in coming years and that NHS spending will face scrutiny.

“However, we do not consider it appropriate to award a contract of this kind to McKinsey, whose recommendations to the NHS in England were roundly rubbished earlier this year.

“There is a wealth of experience within the NHS in Wales and within Welsh academia which should have examined these issues instead of external consultants who we can expect to charge a great deal of money for saying nothing new. All four unions represented within the NHS in Wales are not happy that there was no consultation with us before the decision to appoint external consultants was taken. In fact, we only found out about this quite recently.

“Together with representatives of the other three unions with members working in the NHS we shall be meeting the McKinsey consultants on Friday. We don’t expect anything of benefit to our members to come out of the meeting.”

Mr Galligan said his union was also concerned about the track record of McKinsey. Last month one of its directors in the United States, Anil Kumar, was indicted on corruption charges arising out of what has been described as the world’s biggest hedge fund insider dealing scandal.

Mr Galligan said he made no criticism of Health Minister Edwina Hart for agreeing to engage McKinsey.

“I’m sure she agreed to this only after it was firmly recommended by senior civil servants,” he said.

Welsh Liberal Democrat health spokesman Peter Black said: “I am concerned at the use of private consultants who have already advised front-line cuts in England now being paid to advise on service delivery in Wales.”

An Assembly Government spokesman said: “McKinsey Management Consultants were appointed in September to work with our officials and the new health boards to assist in developing a joint five-year service, workforce and financial strategic framework. The scale of the challenge facing the NHS over the next few years is significant and we make no apologies for bringing in external advice to help meet this challenge.

“McKinsey has been appointed with an explicit brief to work within the public service ethos of the NHS to help set out a radical five-year plan for delivering the best quality healthcare for patients. The framework will be grounded in NHS values and have a uniquely Welsh solution to improving health services within the public sector. It will not pursue market-driven solutions, use of the private sector or Private Finance Initiative schemes. It will maximise the advantages of the new restructured NHS, with a fully integrated healthcare system, closer collaboration with social care, and partnership working with local government, the voluntary sector and trade unions.

“The terms of reference specifically state that there will be no compulsory redundancies. We also expect the cost of hiring McKinsey to be outweighed by the efficiency gains we will realise over the next five years.”

A McKinsey spokesman said: “We do not comment on work we have been commissioned to undertake by clients.”

On the recommendation made to the NHS in England, the spokesman said: “This was a piece of unpublished work that was leaked to the media. There was no McKinsey report as such.”

On the corruption charges made against the firm’s American director, the spokesman said: “This is a totally separate matter to our contract with the Welsh Assembly Government. We were very surprised and remain concerned by the allegations against Anil Kumar. We are taking this matter very seriously and are cooperating fully in the federal investigation.”