Save now, pay later: the pension cuts folly
Not for nothing was public service pensions commission chair Lord Hutton placed at number 28 in HSJ’s list of the people with the most influence on the NHS last year.
His profile read: “Once it was pay that pushed unions towards industrial action, it is now pensions and job security”. Prescient words in light of the teachers’ walk-out this Thursday.
In this week’s HSJ, Jon Restell tackles the issue head on, giving six reasons to “defend” the health service pension.
For the NHS leadership community, a pension is an important part of a package which helps make the decision to commit to a career in the service or, in the case of doctors, to reduce the opportunity to pursue lucrative clinical work.
One of the less talked-about problems with the current NHS reforms is that too little attention has been paid to the incentives needed to ensure a critical mass of leadership talent able to deliver change.
Undermine the NHS pension and the government will be faced with the challenge of finding an alternative incentive attractive enough to retain the best. With downward pressure on senior pay levels, ministers will find one hand tied behind their back.
People in NHS leadership positions – whether managerial or clinical – are unlikely to go strike, but they have just as effective ways of withdrawing their labour. The government should beware of false economies.
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Readers' comments (6)
Anonymous | 1-Jul-2011 10:26 am
Why not give everbody everything they want, then they'll all be happy won't they?
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Anonymous | 1-Jul-2011 12:27 pm
They wouldn't be giving us what we want anon 10.26 they are taking away what we rightfully have and should be able to expect to be honoured... there is a difference you know.
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Anonymous | 1-Jul-2011 1:01 pm
They are taking away the right for private sector individuals to have self-funded pension pots of more than £1.5 million without incurring punitive taxation. Its a King's ransom to most workers (public or private sector) and would provide a lump sum of £375,000 plus a pension of £33,000 p.a index-linked from age 60. However take a look at the Annual Reports of your local NHS Trusts and see how many NHS directors have built up pension entitlements of more than this before they have even reached 60. Out of control?
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Patrick Newman | 2-Jul-2011 9:23 am
A defined benefits pension scheme is justified for both leadership and other staff (like doctors and nurses who simply deal with patients). Pensions are deferred pay and like pay itself should reflect a common understanding of fairness in relation to differentials and value created. Staff in the NHS and the public sector must work together to oppose the current project for the Coalition to get us to join the race to the bottom in employment terms and conditions including pensions.
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Anonymous | 2-Jul-2011 10:23 am
Taxpayers as a whole, Mr Newman, should work together to ensure that the public sector does not take more than its fair share of the national cake and to prevent government repeating the folly of writing post-dated cheques based on dubious revenues from banking bubbles.
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Anonymous | 4-Jul-2011 4:48 pm
I think fairness is the key. Most accept that they will have to work longer, and may even want to - but the spin that suggests that the average public sector pay is £300 per annum more than the private sector is based on 2009 figures prior to a 2 year pay freeze... which is likely to more than reverse any advantage. I think it's unlikely that the media will be arguing for reinstatement of lost benefits when the boot is back on the other foot.
Suggestions from the Hutton report are that the public sector pension pot will be more rather than less affordable in future. I'm totally in support of legistlation empowering private sector employees to have their funds well managed and protected - can we please stop always seeing the lowest common denominator as the best way forward.
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