https://publications.parliament.uk/pa/cm5803/cmselect/cmhealth/112/report.html

So far, pensions have not been central to  the tussle between Rishi Sunak and Liz Truss as they try to  win the hearts and minds of Tory members.

Cost of living issues are sensitive as the Conservative Party membership is not likely to visit a food bank for personal reasons. Nonetheless, the BBC has this morning made “What are you going to do with pensions?” one of the three questions it suggest Tory members should be asking of the candidates.

For most people , pensions mean the state pension and the issue is how long the triple lock will be maintained. But in healthcare, pensions has become a key issue for those who believe the NHS should be free at the point of care. For the point of care is no longer the point of need. Many people, including Tory members and Tory voters are having to wait for care which is needed now. The result of which is that private wards are filling up with patients who are prioritising timely treatment.

Clearly understaffing is a problem. But are NHS pensions an incentive or obstacle to staffing levels? This debate has been running in the pensions press but the debate has – over the past few days – become central to the political debate and it may influence who is our next Prime Minister.

So what is going wrong?

Today , a 103 page report explains why the NHS workforce is unhappy.

The Government made a commitment to increase staff numbers to meet the growing demand on the NHS but as this morning’s report from the House of Commons Health and  Social Care’s expert panel shows, the targets set are only partially being met.

The Committee’s Expert Panel sees the problems facing NHS staff as much wider than pensions, but it makes it clear that current policies are not working, especially around the strategic planning for workforce retention.

Pensions do make it onto the MP’s (rather than the Joint Expert’s) report’s agenda for change but not as prominently as some pension commentators might have thought.

A fix for the pension tax issue is in the top 6 recommendations from the Committee. No specific recommendation on how to do this tho. pic.twitter.com/n1dAjsucsv

— Josephine Cumbo (@JosephineCumbo) July 25, 2022

Indeed this conclusion of the MP’s report (which is not echoed in the Joint Expert’s report) – is short on solutions. But I think Tom Selby is right that in tweeting that the best thing to do with the taper is to scrap it.

The MP’s (rather the Joint Experts) certainly see the pensions taper as having perverse consequences , reducing the value the NHS gives for our money.

 It is a national scandal that senior medical staff are being forced to reduce their working contribution to the NHS or to leave it entirely because of NHS pension arrangements. 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. 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.

In this blog, I ask whether recent evidence linking problems with membership of the NHS pension scheme, are part of the problem.  It asks whether remedies suggested by the BMA and others that could make pensions part of the solution, or whether a bigger picture opportunity is to promote the NHS pension scheme , for what I think it is , a lifetime reward for a career of service.

…In the context of state spending, that is a relatively small price to pay to, a) remove the NHS disincentive to work, and b) simplify the pension tax system

— Tom Selby (@thomasselby) July 25, 2022

Are lengthy waiting times really a result of pension failure?

Rishi Sunak made the reduction of NHS waiting lists a key plank of his campaign on Saturday, calling the  NHS backlog-  a national emergency. He has been warned many times that  taxation issues affecting NHS pensions are driving many NHS medics to reduce their hours or retire early.

The problems facing senior medics from both the Annual and Lifetime Allowances have been the subject of many of my blogs, but it appears the problems with pension, pay and staff retention go much deeper into the NHS and are causing issues at all pay grades.

But , in the final days of his time as Chancellor of the Exchequer, Sunak was told by Dan Poulter, a Conservative MP and NHS doctor, that  his own Government’s pension tax rules were the one of the “biggest threats” to the NHS in terms of retention of senior doctors.

hansard.parliament.uk/Commons/2022-07-13/debates/2C729643-47C6-4BC9-86C3-E729D8852083/details

This month, the Review Body on Doctors’ and Dentists’ Remuneration (DDRB) urged the government to review NHS staff pensions, with staff retention a key concern. The NHS Business Services Authority reported a 35 per cent surge in retirement applications in the spring. Jo Cumbo has highlighted the two key statements

The Government are offered a solution to the problem…

Pensions recycling involves passing on unused employers’ pension contributions to an opted-out member of the pension scheme as part of their total reward. BMA members voted for its introduction to the NHS Pension Scheme in June.

Alex Janiaud has written an  article on this in the FT’s Financial Adviser.It points out that while senior staff are leaving the NHS because they have little incentive to work and save for their retirement, many junior staff are likely to leave the pension scheme and the NHS because they can no longer afford to pay the cost of pension scheme membership. It reports the DDRB’s warning that;-

“The risk of staff leaving the scheme is compounded by the change in the NHS pension contribution structure, staff in the bottom three tiers will see their contributions increase, which combined with the increases in the cost of living, could lead to even more staff leaving the scheme.”

It is however hard to see how the costs of pensions cannot increase over time, the NHS cannot be immune from demographic change. In the overall scheme of things, pensions are only a small part of the problem we have with waiting lists.

Can pension reform ease NHS staffing problems?

The reforms put forward by the BMA are local to the NHS scheme and will go some way to stopping the rot (albeit with implications for other areas of healthcare funding).

But many readers will be asking how it is come to a point where a pension scheme that delivers considerably more to its members, than almost any currently open private scheme, should be a cause of the problem.

In its 103 pages, this morning’s report does not cite pensions as a major factor in the low level of staff morale in the NHS. Indeed in the wider context of staff issues on pay, workload, bullying , training and inequalities, pensions hardly gets a mention.

Which suggests to me that there is an opportunity for Government to present matters differently. For what does not appear to be happening, is the promotion of the NHS pension scheme for what it is, an amazing means of rewarding long-term service in healthcare with a wage in retirement.

As politicians grapple with the  “national emergency” of an NHS backlog, they should consider how they can turn the NHS’ pension scheme from being a perceived liability, to an amazing  asset.