Health leaders in England have challenged the prime minister to solve a pensions problem that has led senior NHS staff to refuse extra shifts or take early retirement, warning it was causing “a dangerous reduction” in the hours doctors were prepared to work this winter.
NHS Providers, which represents hospital, mental health, ambulance and community services, has written to Boris Johnson to demand action as his Conservative party seeks to trumpet its record on the health service in campaigning ahead of the December 12 general election.
Pointedly noting Mr Johnson’s “recent comments accepting the need to solve this issue”, Chris Hopson and Gill Morgan, the organisation’s chief executive and chair, said there was “deep concern and emerging evidence” that the pension problem is driving up waiting times for planned procedures — which are now at record levels. They warned of the risk of “a dangerous reduction in senior clinical hours worked over the vital coming winter period”.
The letter, seen by the Financial Times, has been copied to Matt Hancock, the health secretary, and Sajid Javid, chancellor.
Since 2016 high earners have faced restrictions on the amount of tax relief they can claim on pensions savings, through the introduction of a tapered annual allowance that has left some facing effective marginal tax rates of more than 100 per cent. Most public sector workers are required to contribute a set proportion of their salaries towards their pension, unlike private sector employees.
Last month the government released guidance on how health trusts could use local “workarounds” to ease the situation for the remainder of the 2019/20 financial year, for example by recycling some unused employer pension contributions as salary. However, NHS Providers said that, while this was helpful, “these policies are not enough to truly solve this issue now or in the long run”.
Moreover some NHS organisations were reporting slow uptake of local schemes “due to the time needed to seek advice on legality; the difficulty of passing complex new policies through internal governance procedures; and lower than anticipated interest from clinicians in certain trusts”.
It would “help enormously” if the government and its arm’s length bodies “could communicate rapidly and effectively that provider boards have full and complete ‘air cover’ for adoption of these schemes”, it added.
NHS Providers also expressed concern that the proposed flexibilities had not been extended to senior health service managers, describing this as “a damaging oversight”.
Directors on trust boards had been affected by large and unpredictable tax bills “in the very same way as consultant doctors”, it said.
There was also a risk in allowing senior staff to determine at what rate they wished to accrue their pension — one of the government’s proposed changes from April 2020 — but not extending this flexibility to lower paid staff, who could struggle to afford high contribution rates. This different treatment “has the potential to cause unhelpful division and disquiet across the NHS”, it added.
Mr Hopson and Dame Gill called on the government to “seriously consider” a number of measures, including removing the annual allowance taper altogether for NHS employees; increasing annual allowance income thresholds; introducing pension contribution and accrual flexibilities fairly for all NHS staff; and applying policies retrospectively to the 2019/20 tax year.
