Pensions taxation could see 'exodus of NHS leaders' – NHS Providers

Almost half (44 per cent) of all trust leaders are considering, or already planning, to leave the NHS because of the ongoing pensions crisis, new research by NHS providers has revealed.

The report, An unnecessary divide: the impact of pensions taxation on NHS trust leaders, revealed “widespread” concerns over the impact of restricting solutions to the pensions tax issues to clinical leaders, as the interim plans announced by NHS England in December did.

The research revealed a near-unanimous (97 per cent) view that senior non-clinical staff should be eligible for any pension contributions flexibilities implemented by the government, with slightly less (95 per cent) stating that any flexibilities should be available to all NHS staff.

Furthermore, nine in ten respondents stated that they, and their organisation, were concerned that any differential arrangements for different staff groups could create divisions and further harm the culture and morale amongst NHS staff.

The annual and tapered allowances have drawn attention after causing issues for NHS staff members, which has already seen some doctors cutting back hours or retiring early to avoid pensions taxation.

NHS Providers deputy chief executive, Saffron Cordery, commented: “With many senior doctors reducing the hours they are working or stepping back altogether, this is exacerbating already difficult workforce challenges, and we are now seeing the impact on services with delays and disruption for patients.

"Without urgent action, we face the possibility of an exodus of NHS leaders, at a time when the need for their experience, skills and commitment has never been greater.

“The strength of feeling indicated by these findings shows that an artificial distinction between valued groups of staff is counterproductive and hugely damaging with a knock-on impact for patient care.

"Services rely on the additional discretionary efforts of all staff, including managers, who regularly work beyond their hours to keep services running. We can’t afford to undermine this further or put clinicians off moving into leadership roles on which the sustainability of services depends."

The interim solution introduced in December 2019, which was available only to clinical staff, allowed pension tax bills incurred by doctors to be paid through the ‘scheme pays’ option, however, only 7 per cent of those surveyed had confidence that this would be enough to encourage clinicians to resume additional shifts.

Cordery added: “The evidence suggests that the current solutions do not have the full confidence of clinicians, and leaders do not expect them to bring the doctors back.

"A fair solution has to include both a change to the taper and address the impact of the annual allowance for all staff moving into senior roles or through pay increments.”

A government review of the allowance was confirmed to be ‘underway’ earlier this month.

Meanwhile, reports that the Treasury is preparing to give tax relief to those earning more than £110,000 in an attempt to solve the NHS pensions crisis have also emerged over the last month, receiving industry criticism for not fully addressing the issue.

Commenting on the latest findings, BMA pensions committee chair, Dr Vishal Sharma, added: “The NHS relies on senior doctors, experienced managers and other healthcare professionals to ensure patients get the high-quality care they deserve. The current punitive pension taxation rules are putting this at risk.

“With both doctors and NHS leaders effectively penalised for going to work there must be a definitive solution that works for the whole health service, something the BMA has been campaigning for over the last two years.

“The only proper solution is to scrap the annual allowance in defined benefit schemes such as the NHS pension scheme, a position backed by the government’s own advisors the Office of Tax Simplification.”

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