Gloster orders HSE to slash spend on management consultants by €40m

Bernard Gloster said: “In terms of cost reduction and reduced dependency, I’ve given the CFO (chief financial officer) a target this week to reduce that €113m expenditure by 30%.” File picture: Sasko Lazarov / Photocall Ireland

HSE chief executive, Bernard Gloster, has ordered his finance team to slash its spending on private management consultants by up to €40m.

The multi-million cost of the external advisors came into public focus after the Irish Examiner revealed Cork University Hospital had spent €608,000 on PwC consultants in the space of just three months.

At the Oireachtas Health Committee, Mr Gloster admitted HSE dependency on these companies has “grown too high”. Green Party health spokeswoman Neasa Hourigan had queried why this work is not done in-house.

He told her an initial estimate of management consultancy costs for 2022 of €120m to €180m has been separated into service provision and consultancy.

“The figure is probably in the region of about €113m—that is where my target focus is,” he said. “The €113m is what we’d call traditional management consultants, project management and so on.” 

About 400 people are involved.

“In terms of cost reduction and reduced dependency, I’ve given the CFO (chief financial officer) a target this week to reduce that €113m expenditure by 30%,” he said.

“30% to commence in September for the last quarter of this year, and the full year's of effect of that would be €35m to €40m.” 

Not far enough

However, health unions said this does not go far enough.

Irish Nurses and Midwives Organisation general secretary, Phil Ní Sheaghdha, said: “The 30% reduction in the use of external consultancy agencies is not adequate or ambitious enough. “We want the HSE’s over-reliance on external management consultancy agencies to cease.” 

Forsa Health & Welfare division head, Ashley Connolly, welcomed improved transparency but added: “I don’t believe 30% is sufficient.

“I note the comments made in the Oireachtas Committee and I am alarmed at the vast amounts of public funds spent. Is this the best use of funding from the Exchequer?” 

Labour TD for Cork East, Sean Sherlock, said: “It suggests to me that there is an acknowledgment by the CEO of a culture of over-dependence by the HSE on these services. The big question now is how the figure of 30% was arrived at and whether that is classed as an overspend?” 

It is still not clear whether patients see better outcomes from this, he said.