A hospital trust which came under fire for handing £15m to a ‘big four’ accountancy firm for cost-cutting advice over four years has paid a further seven-figure sum to a rival company in its latest attempt to save money.
Mid Yorkshire Hospitals NHS Trust was heavily criticised over its contract with EY, previously known as Ernst & Young, which ended in September 2015 and was designed to help bosses cut a £37m annual deficit.
It can now be revealed that only a year after the contract ended, the trust has paid out nearly £1.7m on a contract with another leading consultancy firm, Deloitte, to help it balance its books “while maintaining delivery of safe care”.
The disclosure relating to the NHS’s ‘Financial Improvement Programme’ has prompted claims that services are being “bled dry by big accountancy firms”, though bosses say the cost is more than cancelled out by savings and other benefits.
Analysis by The Yorkshire Post reveals that the region’s hospital trusts have spent nearly £40m on ‘big four’ accountancy firms EY, Deloitte, KPMG and PricewaterhouseCoopers, as well as leading rival Grant Thornton, over four years.
More than a third of this, £16.5m, was spent by Mid-Yorkshire, which runs hospitals in Wakefield, Pontefract and Dewsbury, but five trusts ran up bills of more than £2m each over four years.
This includes York Teaching Hospital Trust, which runs eight hospitals across North Yorkshire and spent £3.9m between 2011/12 and 2015/16. Leeds Teaching Hospitals Trust, the largest in the region, spent £2.94m.
Mid-Yorkshire’s hospital trust has come under fire in the last year for its poor performance in a number of areas. Last summer, it was reported to have a £20m financial deficit after an overspend on temporary workers. The trust said the four-year contract with EY helped “stabilise and improve” its financial position, and that the Deloitte contract was awarded through a “competitive process”.
Adrian O’Malley, secretary for the Mid Yorkshire Health branch of Unison, described the cost of employing private consultants as “mind-boggling” given the six per cent efficiency savings NHS trusts were being asked to make.
But Paul Connolly of the Management Consultancies Association said EY’s work in Yorkshire won a national award and many healthcare initiatives came from the work of consultants. Nationally, the spend on consultants has been falling.
Special Report: Page 6.