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It will be news to most NHS employees that thousands of their colleagues are 'faking' illness in order to win a cushy early retirement at public expense - but the readers of certain newspapers will have acquired that impression.

The occasion of this tabloid knee-jerking was Treasury chief secretary Alan Milburn's announcement this month of a review into why 25,000 public sector staff retire on ill-health grounds every year, at an annual cost of more than£1bn.

But is the NHS full of fraudulent shirkers? There is no strong evidence of this - unlike in the Metropolitan Police, where it has been officially admitted that large numbers of officers facing disciplinary charges retire on medical grounds.

Statistics show that the NHS, proportionally, is not the worst offender: according to the Treasury, 33 per cent of NHS retirements were illness- related, compared with local government (50 per cent), the fire service (73 per cent), civil service (22 per cent), teaching (25 per cent) and the armed forces (6 per cent).

There is little evidence that the NHS uses ill-health retirement to 'ease out' difficult or badly performing staff. 'Managing a release on the grounds of ill-health happens occasionally, but I suspect the vast majority are genuine,' says NHS Confederation human resources spokesman Andrew Foster.

Indeed, the real scandal appears to be how NHS staff are forced into ill-health retirement by employers' neglect (direct or indirect), or the iniquity of the pensions scheme. Figures supplied by the Royal College of Nursing show that for the three years to 1997-98, the proportion of those going on grounds of ill-health among nurses taking retirement has risen from 80 per cent to 84 per cent. Many of these have back injuries caused by lack of correct lifting equipment or poor training.

In the ambulance service, only one in 100 frontline staff reaches retirement age. It is estimated that 75-80 per cent of frontline retirements are on ill-health grounds - well over twice the NHS average. They leave because of musculoskeletal injuries and, increasingly, stress.

Part of the problem is that although careers of frontline staff are expected to last around 30 years (in line with the fire and police services, whose pension arrangements reflect this), NHS pension arrangements assume a 40-year career.

According to one senior ambulance officer, this means that paramedics in their 50s struggle on beyond their physical capabilities, wear themselves out, and are forced into ill-health retirement. 'Proper early retirement would help these people to retire with dignity, instead of hanging on until their health breaks down,' he says.

There are also reported cases of NHS employers allegedly persuading staff to retire with the unscrupulous promise that ill-health retirement will be forthcoming, only for the NHS pensions agency to refuse the application, leaving the applicant jobless and pensionless.

Guinette Davies, nurse adviser to the RCN's work-injured nurses group, says that in one such case, a nurse in her 40s with 20 years' NHS service has been left jobless, poor (she exists on benefits as she cannot receive her pension until aged 60) and depressed.

Ill-health retirement is not just confined to frontline staff. According to the Treasury, 'the rate of ill-health retirements among NHS male administrators in their 30s and 40s rose four-fold between 1969 and 1994, before dropping off in the late 1990s'.

Mr Foster suggests that stress may be even more of a factor for women managers, particularly if they are juggling work and family. Much white collar ill-health is stress-related, he suspects, and it is not surprising given the demanding management agenda.

There are many options the NHS can explore to reduce ill-health. The ambulance service is keen on the idea of a dedicated occupational health service. Both the RCN and the ambulance service want more scope for redeploying staff into other areas.

The Treasury review may give the NHS a fresh incentive to consider these options.

This will inevitably require a cash injection, Mr Foster says, but it will pay dividends by improving employees' health and prolonging careers. 'The hatchet-faced financial directors of the world will have to accept there's a payback from this kind of investment.'

The Treasury review: terms of reference

To review factors leading to ill-health retirement, including why incidence is much higher in some parts of the public sector and in some employing authorities than others.

To identify best practice both in the management of pension scheme provisions and the operation of relevant human resource policies.

To make recommendations to ministers on the implementation of measures to spread best practice and to ensure the appropriate use of ill-health retirement benefits.

The review will report 'by early 2000'.