Staffing is the issue keeping NHS leaders awake at night – and which consumes two-thirds of trusts’ spending. The fortnightly The Ward Round newsletter, by HSJ workforce correspondent Annabelle Collins, will make sure you are tuned in to the daily pressures on staff, and the wider trends and policies shaping the workforce. Contact me in confidence.
Doctors are seeking to take a path which has been forged by firefighters and judges, in pledging to take legal action against the government because of the alleged “discriminatory impact” of public sector pension scheme reforms made in 2015.
The British Medical Association’s lawyers have written to health and social care secretary Matt Hancock stating they will support a number of members in bringing age discrimination claims in an employment tribunal against the government.
Similar to the other professions, they argue that the 2015 changes – aimed at containing the long-term cost of public sector pensions – unfairly mean a greater dent in young doctors’ pensions, as they had to transfer to the new scheme.
The letter calls on government to “remedy” the situation for the BMA’s younger members.
On the face of it this seems a battle the docs are unlikely to win – yet pension policy is potentially up for grabs, particularly for NHS staff, with the health and social care secretary already revealing he is in discussions with the Treasury over the pensions tax rules, which he accepts are damaging retention. Meanwhile, the whole health and care sector is united in urgent concern to address its workforce shortages.
Could the health and social care secretary become a powerful advocate when it comes to lobbying the Treasury for a wider-reaching change?
Jumping the gun?
However, Managers in Partnership chief executive Jon Restell told me it feels as if the BMA is “jumping the gun” with its intention to take the government to court.
In particular, the firefighters and judges’ cases were backed in the Court of Appeal at the end of last year, but government has appealed to the Supreme Court – which has made no decision so far.
“We are a long way off understanding how these cases will affect the fire fighters and judges schemes, let alone wider public sector pension schemes,” Mr Restell explained.
He said he hoped health unions would work together to protect members’ interests and safeguard the pension schemes in the long term.
While it is the doctors who have grabbed more headlines, it is an associated but different issue from the 2015 reforms which is hitting senior managers (and indeed senior clinicians).
In particular there are fears that senior managers and clinicians will stop taking on extra work – or leave the NHS altogether – because of these changes, and HSJ has been hearing concerns, with increasing urgency, about this. I reported in January warnings from NHS Employers that changes to tax allowances were causing high earners to cut down their hours, retire early or quit.
The big question is whether the NHS could be given special treatment to escape these constraints. The rule changes are weaved into wider public sector reforms – so amending them just for the NHS scheme would open a large can of worms for the Treasury and public sector employers.
A piece of the puzzle
On the subject of the tax problems for high earning public sector workers, the detail of the debate centres on the impact of the scheme’s annual allowance, taper on tax allowances, and the lifetime allowance. They are resulting in some receiving very large often unexpected tax bills – and some are warning this is snowballing into a crisis for the NHS.
According to Gary Wannan, BMA consultants committee acting chair, very small increases in pay are resulting in very large calculated pension growth, resulting in eye-watering tax bills.
“This calculated [pension] growth is added to the consultants’ actual income to derive their ‘adjusted income’,” Dr Wannan said. “This means many consultants are subject to tapering (ie a reduction of their annual allowance), even when the actual pay of the vast majority of consultants is significantly below the £150,000 [annual] limit.”
Consultant intensivist Nitin Arora said the resulting bills can seem “like double, or even triple taxation…Doctors are frightened, and this may prompt many to stop doing extra non-pensionable work”. This is work that many services rely on.