15th February 2017
By Graham Smith

The people charged with cutting £264million from Cornwall’s health budget are hiring private sector consultants to help produce their final report.

The Cornwall and Isles of Scilly Sustainability and Transformation Plan (STP), chaired by Cornwall Council chief executive Kate Kennally, is refusing to confirm details but sources have told Cornwall Reports that consultancy fees of up to £1.2million have already been agreed.

The US-based firm GE Healthcare Finnamore has recently been appointed to help identify which community health facilities will be axed.

Another private consultancy firm, Price Waterhouse Coopers, had already been engaged to help the STP go about its work.

Private sector consultants such as GE Healthcare Finnamores and PWC are often brought in to help produce reports which would otherwise fail the scrutiny of being “apolitical” while still delivering commercial results.  Politicians can find them useful when they need to avoid responsibility for unpopular decisions.

The chief executives of the various organisations involved in the STP are now trying to agree which of them should foot the consultants’ bill.   The four people behind the decision to hire consultants were Kathy Byrne, Chief Executive, Royal Cornwall Hospitals NHS Trust; Kate Kennally, Chief Executive, Cornwall Council, Jackie Pendleton, Interim Chief Officer, NHS Kernow CCG and Phil Confue, Chief Executive, Cornwall Partnership NHS Foundation Trust.  None is elected.

These four chief executives form the main decision-making board of the STP, and apart from their spending on consultants, it is not known how much the process of identifying savings is itself costing taxpayers.  Inevitably, there are questions over whether the money could be better spent but in the vacuum of publicly-available information there are no answers.

Among those local hospitals thought to be most at risk of eventual closure is the Edward Hain community hospital at St Ives, which has already been closed for more than a year because health chiefs say parts of the building present a potential fire risk.

A spokesman for the STP confirmed that GE Healthcare Finnamore were "the most likely strategic partners," but would not comment on the fee, or on the terms of reference.  He said the STP did not have a specific budget for the use of private consultants, and there was some question over whether the STP itself had a defined budget at all.

"There are still some commercial discussions to be concluded," he said.

All 12 beds at Edward Hain in St Ives have been closed since last February because of fire safety fears.  Officials claim the repair bill now stands at more than £1 million, but this is disputed by the local hospital league of friends.

GE, whose headquarters is in Chicago, is the fourth largest company in the world. Its website says it was founded in 1878 by Thomas Edison (inventor of the light bulb), and is the only company from the original 1896 Dow Jones index still listed today.  GE Healthcare Finnamore’s website also offers a wealth of well-produced videos.



PWC is one of the leading firms of private consultants which public bodies, particularly Cornwall Council, turn to when officials fear they might lack the necessary expertise themselves.  One of the key figures in PWC’s health division is former Labour Health Secretary Alan Milburn.  The proposed fee of £1.2million represents less than 0.5% of the proposed £264million “saving.”

News that the STP either has, or is about to, spend more than £1million on private sector consultants pours petrol onto an already volatile political debate. This morning (Wednesday) Cornwall Reports asked the STP to “Explain the cost-benefit rationale, particularly in relation to why it is thought to be better to spend money on consultants rather than patient care/health infrastructure?  How many Treliske beds could have been ‘unblocked’ for £1.2m? Have you told the MPs?”

None of these questions was answered.  Cornwall Council is to hold two public “select committee” style hearings next month, on 2nd and 6th March, and it would be surprising if senior officials are not also pressed for answers then.

A public meeting in St Ives tomorrow (Thursday) is expecting to hear an update on the progress of the campaign to re-open the Edward Hain hospital.

Cornwall Reports this morning asked St Ives MP Derek Thomas (Conservative) to comment on the use of private consultants.  He has yet to respond.

Health campaigner and Liberal Democrat Andrew George said:"I do feel some sympathy for local health managers. The Conservative Government has handed them a "hospital pass."  Telling them they must cut at least £264m out of our NHS but passing the buck at the same time.  They can’t be very confident about their plans if they feel the need to pay an arm and a leg to a management consultant to dress it up for them. 

"Or perhaps they know it doesn't add up and it's the best they can do but just want some slick work done to help present it in the best light? 

"Either way this won't look good in places like St Ives where most people will feel this money would be better spent saving the local hospital than paying eye-watering amounts to slick management consultants so they can make the case for closing it!"