Cash-strapped Southend Hospital hired consultants to tell them how to save money – and have paid them £12,550 so far for just eight days’ work.

Hospital bosses refused to reveal the full amount it is paying Andrew Murphy and his two colleagues from Kingsgate Advisory, but at that eight-day rate they would earn £299,631 during the term of their contract, which runs from September 22 to March 31, 2015.

The hospital is already looking at a black hole of £8.7million by the end of 2014/15, which could lead to a £20million cost-cutting programme next year.

It also already employs a director of finance, James O’Sullivan, whose predecessor was paid between £125,000 and £135,000 in 2013/14.

Dean Jones, from the Unison branch at the hospital, said: “The concern for us is that we have a lot of highly paid managers coming in, yet the hospital is still asking staff how to save money, with morale very low.

“Kingsgate have been here for six weeks now and has the deficit come down? And are we paying them travel expenses?

The costs can go up and up and up.”

Mr Murphy leads a small team of consultants. His firm, Kingsgate, claims it is “a transformation, transition, and turnaround business working in challenged and failed organisations”.

The hospital confirmed in a a freedom of information request the team was paid £12,550 between September 22 to September 30. It hasn’t said where the sum come from.

Dr Marimuthu Velmurugan, who sits on the hospital’s governance team, said: “Yes, it is very expensive, but if you pay peanuts you will get monkeys working.

“I am confident they will be able to deliver efficiencies and we are in this position because we are so under-funded by the Government.”

 

SHOULD THEY BE PAID SO MUCH?

Yes - Sue Hardy, interim chief executive of the hospital

"Andrew  Murphy from Kingsgate has been appointed as director of transformation, a non-executive role, which will see him and a small team from the company work alongside trust staff to get us back on track financially, which is key to ensuring any changes made are clinically sound and sustainable.

“The contract, which remains commercially sensitive, is for a six-month period.

"However, we believe this short-term investment will enable us to gain in the longer term by reducing waste and duplication and improving productivity which in turn will enable us to continue to invest in our services going forward. "While our financial targets need to be met, we are clear that patient safety and quality must remain our priority.”

No - Jonathan Isaby, chief executive of the Taxpayers' Alliance

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"Consultants can, on occasion, save money and, clearly, Southend Hospital has thoroughly botched their attempt at finding savings.

“In fact, it’s hard to imagine how it could have gone any worse, as we look at a year-end deficit some £7m worse than was anticipated.

“But that’s no excuse for the obscene amount of money the hospital is throwing at this consultancy firm, nor for the lack of transparency involved.

“Spending more than a £1,000 a day, as the Echo believes, represents a pretty bizarre way to go about a costcutting drive.

“If we’re to keep frontline services intact, we need to cut down on wasteful spending.

This firmwill have to find an awful lot of it, if they’re to justify this huge contract.”

 

Who is Andrew Murphy?

 

ANDREW Murphy was paid £156,000 to work with finance bosses at Barnet and Chase Hospitals over a five-month period two years ago.

Mr Murphy was appointed to help out with a £22million savings programme at the London hospital from August 2012 to January 2013, and covered the role of operating officer for a few months after that.

The hospital’s statement of accounts shows it finished 2012/13 with a £639,000 surplus – although this was down on £2.2million in 2011/12.

The Echo understands that health watchdog Monitor had concerns about the level of cost-cutting at the hospital.

However, Mr Murphy got a glowing report from the hospital’s chief executive, Tim Peachy, who said on Kingsgate’s website: “Andrew Murphy and Kingsgate are delivery focussed and were able to bring about rapid financial change.”