HSE branded 'a cash cow' over €458m spend on external consultants
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The HSE spent more than €458m last year on a range of external consultancy firms, new figures show, leading one TD to warn that the State has become “a cash cow” for such companies.
The figure is €57m higher than what was spent in 2021. It includes €113m on private management consultancy mainly to six large firms, legal fees of €24.5m, and €313.5m on professional fees including outsourcing of homecare and waiting list initiatives.
Tighter control around new contracts for management consultancy was recommended on June 15 by HSE chief financial officer Stephen Mulvany in a briefing for CEO Bernard Gloster. The spend of €113m would pay for 1,100 top-level HSE managerial staff, the document shows.
Analysing this in light of financial requirements from the Department of Public Expenditure and Reform (DPER), the CFO raised concerns. “I can confirm that very little of this €113m meets the DEPR definition of ‘consultancy’,” the document states.
He found “the vast bulk” was spent on contractors doing tasks such as project management and said “a small element (less than 5%) of the €113m likely to be considered as ‘external service provision’.”
The briefing states: “This €113.4m represents c 0.5% of the HSE 2022 budget.”
The analysis, released under the Freedom of Information Act, estimates: “This €113m is the equivalent of 300-400 full-time staff across the year at more than three times the cost of directly employed staff.”
The CFO added: “€113m would pay for c 1,100 Grade VIII staff or looked at another way 300-400 Grade VIII staff would cost €30m-€40m ie €70m- €80m less than the €113m”.
Spending by Cork University Hospital and the South/SouthWest Hospital Group is highlighted. “The vast bulk of this €113m relates to cost incurred by the corporate centre of the HSE on behalf of the whole organisation, except for some costs related to CUH and SSWHG,” the briefing shows.
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The previously revealed CUH spent €2.3m on PWC management consultancy in eight months, with the hospital strongly defending the spend.
Reacting to the latest figure, Green Party health spokeswoman Neasa Hourigan said: “the Irish state has become a cash cow for these companies.”
She added: “I welcome Bernard Gloster’s comments that he has set a target to reduce it, but I suspect this will be the first target of many because we really need to tackle this. This is wildly out of scale with what you would expect to see in terms of those fees.”
She warned the overall spend is an indication of a culture of relying on external providers. “What is this going to look like, if we did remove most of it, what would that look like?” she said.
“We would really need to set about serious enriching and developing of skills in-house in the HSE, and removing a culture whereby things are outsourced. That is no small undertaking.”
The CFO also said use of external management consultants allows for “a rapid response” which will need to be preserved. He recommended “additional controls” and a limit for the remainder of this year which Mr Gloster has accepted.