The Health and Social Care committee has called NHS pension arrangements ‘a national scandal’ as senior doctors are being forced to reduce their hours or stop work entirely.
In a report called Workforce: recruitment, training and retention in health and social care, published today (July 25), the committee said it heard evidence of senior medical staff both reducing their hours and retiring earlier than they would otherwise because of concerns about pensions.
Referencing a recent survey by the Royal College of Surgeons of England, it found that 69 per cent of respondents had reduced the amount of time they spent working in the NHS as a direct result of changes to pension taxation rules.
In 2019, the Royal College of Physicians found that more than 50 per cent of the 2,800 doctors surveyed had retired earlier than previously planned, with most citing pensions concerns as a reason.
The committee said: “It is a national scandal that senior doctors are being forced to reduce their working contribution to the NHS or to leave it entirely because of NHS pension arrangements.
“We accept the government has made some progress in this direction with changes to the taper rate of the annual allowance. But the problem persists and having rejected calls to establish a tax unregistered scheme the government must act swiftly to establish an alternative scheme and prevent the early retirement of consultants from the NHS.”
The British Medical Association (BMA) warned that without decisive action on pensions, more than 10 per cent of the consultant workforce, and a similar proportion of GPs, are likely to retire within the next 18 months.
University Hospital of North Midlands NHS Trust consultant plastic and reconstructive surgeon Wayne Jaffe, described his retirement as happening “almost against his will” in the context of “a cull of senior doctors” faced with “unfair and punitive additional taxes which I have to pay each year because of my seniority.”
The committee said Jaffe was “paying tens of thousands of pounds additional tax each January due to pension growth".
It is a damning indictment of a government that has completely failed to take any meaningful action on workforce issues, and has no plan going forward.Dr Emma Runswick, BMAThe committee recommended a number of actions the government should take to prevent “haemorrhaging senior staff”.
The report recommended the NHS commit that within 12 months, all regular NHS staff should be able to opt for similar flexibilities to those enjoyed by locum or agency staff.
This should include making reduced or flexible hours available to everyone, but especially those with caring responsibilities and those nearing retirement, with increased flexibility for home working using technology.
It said NHSE should develop a national NHS “retire and return” policy to replace ad hoc local schemes, which should include greater flexibility in the role that more senior members of the workforce can play, including around late-night and on-call working.
The report said: “Clearly, the government’s changes to tax regulations have not gone far enough to remedy this crisis.
“With mounting waiting lists and ever-increasing demands, the NHS cannot afford to lose staff who are willing and able to work, and urgent action is needed to reform NHS pensions and prevent the haemorrhage of senior staff.”
It added: “The government must act swiftly to reform the NHS pension scheme to prevent senior staff from reducing their hours and retiring early from the NHS.”
Quilter NHS specialist Graham Crossley, said: “The NHS is facing significant headwinds at the moment, which will be compounded by issues surrounding NHS pensions. Doctors are risking their lives and the least we can do is ensure they are not being financially penalised for it.
“Today’s report from the Health and Social Care committee specifically calls out ‘pensions taxation’ as one of the issues causing some doctors to reduce the number of hours they worked or retire early. Finally, there is a realisation that the government’s changes to annual allowance taper was a sticking plaster that failed to address the complexities of NHS pension and taxation.”
Staffing emergency and dire consequences
Responding to the report, BMA council deputy chair Dr Emma Runswick, said it illustrates the workforce emergency facing the health and care services and the “dire consequences” this is having on staff and patients.
“It is a damning indictment of a government that has completely failed to take any meaningful action on workforce issues, and has no plan going forward,” she said.
“Despite obvious need, the government refuses to do the basic work of laying out how many staff we need to meet the health and care demands of the population, now or in the future.”
Runswick said the government should drastically increase medical school and training places with full funding and bureaucratic barriers for international colleagues seeking to practise here should be removed and support increased.
“Alongside this we need support to keep existing doctors in the workforce, especially after the most harrowing and exhausting two years many will have ever experienced,” she said.
“We agree with the committee that punitive pension rules which push experienced doctors into early retirement or reducing hours are a ‘national scandal’.
“And this week’s announcement of another brutal real-terms pay cut will drive more doctors away.”
Some doctors have seen their pay fall in real terms by around a third in the last 14 years, and she argued that any workforce strategy will fall flat with no commitment to reverse this huge cut.
“What is most scandalous is that this is a mess entirely the government’s own doing through its absurd and unfair pension taxation policy – and it is entirely within its gift to solve, quickly.” - Dr Vishal Sharma, BMAShe added: “Doctors are sick of being undervalued; whether that’s through years of cuts to our wages, being forced to pay for the ‘luxury’ of parking at our own workplaces, or having no access to a decent meal on night shifts.
“We’re working in crumbling buildings with outdated and unreliable IT systems that make our jobs more difficult and take valuable time away from treating patients.
“This, combined with a significant gender pay gap, lack of support for those experiencing the menopause and limited options for flexible working, means the health service is failing to harness the best out of staff from all backgrounds, ages and genders.”
BMA pensions committee chair Dr Vishal Sharma explained that the fundamental problem is with the way the NHS pension interacts with taxation policy, the result of which is that an NHS employee can be “financially worse off” for working “for longer or by not reducing hours worked”.
This creates a situation in which senior healthcare professionals “are in effect prevented from contributing further or continuing to remain within the healthcare sector.”
He said he agreed with the committee’s findings that this is a "national scandal" and that senior doctors are being driven to reduce their hours or retire early, just when the NHS is facing the "biggest workforce crisis in its history".
“What is most scandalous is that this is a mess entirely the government’s own doing through its absurd and unfair pension taxation policy – and it is entirely within its gift to solve, quickly,” he said.
“It’s good to see the committee taking heed of the BMA’s warnings, and fully recognise that despite the changes to the taper in 2020, there remains an urgent and pressing need for government to solve this issue in order to prevent a further exodus of doctors.
“It is also vital that there is reform of pension taxation rules so that doctors can maximise the amount of care they can provide to their patients.”
For those doctors who are left with no choice but to leave the pension scheme, the committee highlighted the necessity for employers to be mandated to ‘recycle’ the full value of pension contributions back to the employee in their wages, a measure backed by the BMA and most recently the review body for doctors’ pay, the DDRB – as well as the outgoing Secretary of State for Health and Social Care.
“At the BMA we still believe that the long-term solution is a tax unregistered scheme, similar to the one implemented for judges to solve the retention crisis in the judiciary,” he said.
“Such a scheme would remove the disincentives from providing more care for patients and enable doctors to work for longer. It would also ensure that doctors paid the correct amount of tax on their pension savings and therefore is a fair solution for the taxpayer.”
FTAdviser understands that the government is on track to meet the 50,000 nurses manifesto commitment, with nursing numbers over 29,000 higher in April 2022 than they were in September 2019.
It has also increased the number of GP training places available to 4,000 in 2021 – up from 2,671 in 2014.
A Department of Health and Social Care spokesperson said: “We hugely value and appreciate the dedication and contribution of NHS and social care staff. We are growing the health and social care workforce, with over 4,000 more doctors, and 9,600 more nurses compared to last year, and over 1,400 more doctors in general practice compared to March 2019.
“As we continue to deliver on our commitment to recruit 50,000 more nurses by 2024, we are also running a £95mn recruitment drive for maternity services and providing £500mn to develop our valued social care workforce, including through training opportunities and new career pathways.
“We have commissioned NHS England to develop a long term workforce plan to recruit and support NHS staff while they deliver high quality, safe care to patients and help to bust the Covid backlogs.”
sonia.rach@ft.com
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