The government is considering extending the NHS pension to private firms doing health service work under the “any qualified provider” scheme, even where staff have not been formally transferred from the health service.
The move, announced this afternoon alongside the government’s final offer to unions on NHS pensions, would provide additional security for staff who end up working in AQP services through routes other than through TUPE, or Transfer of Undertakings (Protection of Employment) Regulations.
NHS pensions could be extended to people in other services funded under the national NHS contract in addition to AQP, for example where commissioners have awarded work via outsourcing, procurement or tender routes. However, it could be restricted to certain types of AQP staff or limited to only those working at certain types of firms.
As reported previously on hsj.co.uk, staff transferred from the NHS to the private sector via TUPE would retain access to the pension scheme under the government’s final offer to unions as part of a separate package of sweeping changes.
The changes today would extend subsidised pensions to some private companies even where TUPE does not apply. This would make it far easier for firms to compete with NHS organisations, which are able to provide subsidised pensions.
Terms of reference for a review of the potential changes state: “The background to…the review was the recognition that the roll out of competition ‘in the market’ through AQP would mean that in future NHS staff might potentially move to non NHS providers not through TUPE but through the effects of competition.
“Lack of access to the NHS pension scheme for non NHS AQPs may also act as a barrier to entry by making it difficult to recruit experienced staff.”
The group will consider a range of options, including making no changes and limiting access to the scheme to staff belonging to organisations with a certain turnover.
It will examine whether there should be a framework making access to the NHS Pension Scheme a “term of business” for AQPs and “other appropriate providers”.
Analysis of the options is expected to be completed by September.
Managers in Partnership chief executive Jon Restell called the review “an important development” that could “give the same [pensions] provision to staff even where they’re not transferred from the NHS”.
The government’s financial liabilities would be limited due to the fact many AQP staff would have come from the NHS originally, where they would have enjoyed a government-funded pension anyway, he said.
But he pointed to several areas that still needed to be ironed out, including the extent to which AQP firms would be able to choose which of their staff should have access to the NHS scheme.
There were questions around how a large private firm bidding for a relatively small AQP contract would “draw the circle” around staff eligible for the NHS scheme. Some may feel obliged to offer the same deal to other staff, reducing the attractiveness of contracts, he said.
The pensions final offer announced today would see the final salary scheme scrapped, with pensions instead dependent on an employee’s “career average” salary.
Retirement age will raise in line with the state pension age and the value of pensions will build up at a rate of 1/54th of pensionable pay each year.
The average employee will contribute 9.8 per cent, although contributions will be tiered.
Unison and MiP will ballot members on the final offer following a meeting on 21 March. Other unions are meeting to decide their next steps.
NHS Employers director Dean Royles said: “After intensive and at times challenging discussions, it is right that NHS staff now have the opportunity to thoroughly consider the costs, benefits and features of the NHS pension proposals and what it means for them now and in the future. We all owe it to staff to move beyond the headlines into the bones of the schemes.”