HAVE WE BEEN MCKINSEY’D?

10-09-2009

Never mind getting Tango’d – have we been McKinsey’d? After their recent proposals for massive cuts in the NHS, Barbara Panvel assesses the impact of one of the Western world’s leading business consultancies.

A headline in The Times on the McKinsey consultancy’s study says that the NHS may need to lose 137,000 staff to meet a £20 billion savings target. It recommended that £700 million could be saved if the NHS no longer performed operations such as tonsillectomies, varicose vein removal and some hysterectomies, leaving people with such conditions no option but private treatment.

The proposal that up to £8.3 billion of hospital estates could be “freed up” to generate income, alongside many years’ liberation of playing fields, parks and swimming baths would be good news for developers.

Columnist Simon Jenkins described consultancy as “the old game of lifting money from the taxpayer by bamboozling ministers and officials,” and asserts that McKinsey, which once boasted in a documentary that its staff were “masters of the universe”, has taken the place of the cabinet, MPs, the civil service and the Labour party.

McKinsey’s employees are called partners and many on leaving are placed in influential positions in corporations and as government advisors, forming a loyal and supportive network which promotes the consultancy, operating in all but the poorest countries, seeing economic growth as ‘imperative’ and powerfully promoting privatisation, supermarkets, outsourcing, GM crops and nuclear power.

More recently the consultancy has entered another sector: the Carbon Trust chief executive and chief operating officer were McKinsey partners, the European Commission's 2005 review of the EU Emissions Trading Scheme was conducted “under McKinsey’s guidance”. In 2007it was commissioned by the Confederation of British Industry to produce an analysis of the options for greenhouse gas reduction in the U.K.

All this has been offered despite McKinsey’s track record in Britain: its role in the poorly performing amalgamation of the Inland Revenue with Customs, in the MoD and in a series of expensive computer disasters.

Clare Short’s Department for International Development funded McKinsey to produce a report (Vision 2020) for the government of Andhra Pradesh, advising that 20-25 million people - Andhra Pradesh's farming population - should leave the land, to be replaced by machines, chemicals, and genetically engineered crops. A group of farmers chosen by their local village councils came to London to lobby MPs about this programme, which ended when the AP government lost power at the next election.

Sometimes nicknamed the ‘Jesuits of Capitalism’, McKinsey was featured in a substantial article in the Independent in 2005 showing in detail that McKinsey is ‘well-represented in our governing circles – the ‘power behind the throne’? The author, Katherine Griffiths added: ‘ Tony Blair is more likely to listen to its advisers than to his own ministers’.

In the same article, Lord Hanningfield, a Conservative peer and a House of Lords whip, said that he believed the situation is of such concern that a thorough investigation of the relationship between Whitehall and the firm is needed. "At present we almost have a revolving door, with senior figures moving in both directions," he says. "Given the scale and value of existing government contracts undertaken by McKinsey, the relationship must be beyond reproach."

Those who have moved through that door include Sir Michael Barber, head of Tony Blair's delivery unit, who left Downing Street for McKinsey to advise on “government”, while McKinsey’s David Bennett became Tony Blair’s Head of Strategy and Policy. He is now chief executive of ‘The 10 Partnership’, which extols its ‘influential network of contacts throughout central and local government, including relations with politicians, from both the main parties, and officials, at the highest levels’ and its ‘close links with thought leaders in academia and think-tanks’.

Lord Birt, a close personal adviser to Blair, spent millions of pounds on McKinsey consultants to design its "internal market" while he was director-general of the BBC in the 1990s. He was a paid consultant at McKinsey but left in 2005 following allegations from the Conservatives of a conflict of interest. Adair Turner, now chairman of the City's watchdog, the Financial Services Authority (FSA), was a McKinsey director.

How many of these quangos and consultancies directly or indirectly funded by the tax-payer make any beneficial contribution to the lives of their paymasters?

Will any government ever dare to sever their links with these unelected bodies and carry out the threats of a cull or bonfire made by David Cameron and Rhodri Morgan?

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