Doctors warn of NHS workforce ‘crisis’ over pension tax rules

The prime minister has been urged by doctors’ leaders to intervene over pension changes that risk creating “a crippling workforce crisis” in the NHS and could even jeopardise the government’s ability to deploy troops.

The British Medical Association called on Theresa May to use her final days in office to address rules under which high earners, such as hospital consultants and GPs, can see their annual allowance — a limit on the amount that can be contributed to a pension each year, while still receiving tax relief — tapered to as low as £10,000.

An investigation by the Financial Times earlier this year found that consultants were refusing to take on extra work that could have helped to slim lengthening queues for treatment, for fear of busting the new allowances. The issue has also been blamed for a rising number of family doctors taking early retirement.

In his letter to Mrs May, Chaand Nagpaul, who chairs the BMA’s ruling council, said the association had sought to alert the Treasury, and wider government, “of the real possibility of losing large swathes of expertise from the NHS’s most experienced doctors at a time when the overstretched service needs it most”.

The problem was also having an impact on Defence Medical Services, the umbrella organisation that provides healthcare to the armed forces, where “unless a resolution is found it will lead to severe shortages and put at risk the ability to deploy”, Dr Nagpaul added.

The power to resolve the situation ultimately lay with the Treasury, he said, “and frankly it has taken too long for the problem to be properly acknowledged”.

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Last week Matt Hancock, health and social care secretary, announced a consultation on making the NHS pension scheme more flexible. However, one of its key proposals — that doctors could halve their pension contributions in exchange for halving the rate of pension growth — would “categorically not solve the problem”, said Dr Nagpaul.

It would not only lead to doctors receiving a lower pension, but would not remove the perverse incentive for doctors to reduce the work they did for the NHS.

“This is particularly the case if there is no recycling of employers’ pension contributions back to the employees,” it added.

While the BMA hoped to meet Mr Hancock to discuss short-term options to ease the situation, the true solution lay in pension taxation reform, he argued.

Members of the NHS pension scheme had no control over the amount they paid into their pension and tax relief was already limited via the lifetime allowance, he said. “The annual and tapered annual allowance are not only unnecessary but are significantly damaging the ability to maintain safe, sufficient patient care and must be scrapped urgently,” Dr Nagpaul said.

Urging Mrs May to ensure that chancellor Philip Hammond should meet doctors’ leaders immediately to find a solution, he warned: “Every delay brings forward the likelihood of a crippling workforce crisis and patient care suffering.”

The government said it was “consulting on proposals to offer senior clinicians a new pensions option, empowering them to build their NHS pension more gradually over their career by making steadier contributions towards their pension, without facing regular significant tax charges”.

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It would “listen carefully to the profession during consultation to reach a final proposition that works for both staff and taxpayers”.



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