The Health Service Executive’s (HSE) heavy reliance on management consultants is revealed in new figures showing it signed 120 major tenders with external companies over the past eight years at a total cost estimated at close to €500 million.
The information released by the HSE shows that 22 of the tenders were for three years in duration or more. One contract with KPMG for “training and consultancy for leadership development across the HSE” lasted for five years, after the initial three-year period was extended by another two years.
Six of the contracts were for four years or more including one with Ernst and Young for the development of a Microsoft Office 365 onboarding programme.
The average period per tender was over 14 months, with many consultants getting extensions on original tenders, ranging from six months to two years.
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HSE awarded €500m worth of tenders to external companies in past eight years, figures show
The figures, that were released to Sinn Féin health spokesman David Cullinane as a reply to a parliamentary question, do not include the duration for three separate contracts awarded to consultants PwC, KPMG, and Deloitte/Prospectus to respond to the HSE ransomware attack.
The specific nature of the work included management consultancy, governance, ICT consultancy, financial analysis, project management. In some instances, employees of the big consultancy firms – KPMG, PwC, EY, Grant Thornton, Deloitte, and Accenture – were seconded to the HSE for specific tasks, and a small number were seconded for periods of four years.
The HSE refused to disclose the value of the tenders on grounds of commercial sensitivity. However, detailed analysis by The Irish Times of HSE purchase order payments of over €100,000 showed that a total of €58 million was paid to management consultants in 2023. The overall figure will be higher as the figures don’t capture amounts paid that were under €100,000.
Of the big consultancy firms, the highest earner was Ernst and Young, paid a total of €33.5 million by the HSE in 2023 for orders over €100,000. The next highest earner was PwC (€15.8 million) followed by Deloitte (€4.2 million); Grant Thornton (€2 million); KPMG (€1.6 million) and PA Consulting (€1.47 million).
In 2023, HSE chief executive Bernard Gloster estimated that the total reliance of the HSE on external consultants could be over €120 million annually. Its chief financial officer, Stephen Mulvanney, estimated that the cost of some of the contracts was three times higher than if people were directly employed. Mr Gloster told an Oireachtas committee last year that the dependency on outside consultants would have to be reduced quickly by the organisation.
A spokesman for the HSE said spending on consultancy was down 29 per cent in the first quarter of 2024 and down 45 per cent in the second quarter compared to the same quarters last year.
“We are on track to achieve our end-2024 target, and continue to work to ensure we get the full value from our spend on consultancy.”
Minister for Health Stephen Donnelly told The Irish Times there was an overreliance on management consultants in the HSE. “We need that kind of capacity within the HSE itself,” he said.
Procurement figures for spends of over €100,000 for the first half of 2024 seem to support this with overall spending on management consultancy at €15 million, less than half the amount spent on consultancy in the first six months of 2023.
Responding to the information, Mr Cullinane said the HSE needed to be more transparent in how it uses, funds and reports on external consultancy.
“The HSE needs to demonstrate why more insourcing cannot be done rather than outsourcing to expensive consultancy firms.
“Efficiency, transparency and value for money must be at the heart of reforming and modernising our public health services,” he said.
The HSE was not in a position to respond to queries submitted on this matter by The Irish Times last week.
Some of the other four-year contracts included a four-year contract with PwC for “public health reform programme”; a programme manager to support a management database; and a manager to work on the “application modernisation programme”.
