Hospital consultants scrapping operations because of pension rules

Hospital consultants are scrapping operations because barmy pension rules mean it costs THEM to work overtime. No wonder NHS veteran J. MEIRION THOMAS has dubbed it Operation Catastrophe

  • The BMA has been warning for months of a looming catastrophe
  • The pension rules penalise doctors rather than reward them for extra duties
  • The blame lies not with the doctors: it lies with the Government

As a consultant who has worked in the NHS for 45 years, I know it is facing another crisis

As well-paid professionals who enjoy a comfortable lifestyle, senior doctors rarely invite much sympathy when they start whingeing about their pay and conditions.

But it is time to listen to them because the NHS is facing another crisis — of longer waiting-lists, cancelled operations and a backlog of unread scans and tests that may result in lives put at risk.

However, this situation is not of their making.

The ethic of public service on which our health system depends is being stretched beyond breaking point by ill-conceived pension rules implemented by politicians and which penalise experienced doctors rather than reward them for the extra duties they perform. 

The British Medical Association (BMA) has been warning for months that the utterly crazy and complex system presents a looming catastrophe.

In March, the BMA wrote to Chancellor Philip Hammond to say that unless pension rules were changed, there would be ‘a perfect storm’ which would force hospital consultants — reluctantly — to ‘retire, reduce their workload, abandon leadership positions and stop covering vacancies’, thereby ‘seriously jeopardising the sustainability of the NHS’.

That storm has arrived.

The number of people on waiting lists for routine surgery, such as hip replacements and hernia repairs, has risen by up to 50 per cent in England, while figures for April show that the proportion of patients treated within 18 weeks — the maximum waiting time for non-urgent treatments — was at its lowest level since records began.

This is the result of an increase in the number of senior doctors refusing to take on additional shifts beyond their planned hours because they fear punitive tax bills linked to the size of their pension pots.

At the Royal Bournemouth Hospital, for example, scores of operations are likely to be cancelled as there are no consultant anaesthetists willing to work over their contracted hours for fear they will suffer financially.

In March, the BMA wrote to Chancellor Philip Hammond to say that unless pension rules were changed, there would be ‘a perfect storm’

Alarmingly, Dr Tony Goldstone, a clinical director at Hull University Teaching Hospitals NHS Trust, warns: ‘We’re only just beginning to see the impact of these taxes. As more doctors get affected, it’s going to get a lot worse.’

He adds: ‘Colleagues who used to prop up services by working additional weekends, on top of their already onerous working rotas, can no longer afford to do this.’

Let me say again that the blame lies not with the doctors: it lies with the Government. 

Through a spectacular misjudgment, it has created a flawed pension structure which discourages both saving for retirement and the acceptance of greater responsibility and workload — two qualities that are seen as civic virtues.

It is being reported in some quarters that senior doctors are ‘working to rule’ in this pensions dispute — as if they were a bunch of militants eager to set up a picket line.

Nothing could be further from the truth.

The consultants continue to work their contracted hours with their usual care and expertise. 

Understandably, though, many are reluctant to do overtime — which is vital if the NHS is to keep on top of ever-increasing patient demand. This is not for any ideological or vexatious reasons, but because they will end up losing in the long run.

Doctors face the bizarre situation whereby the pension tax penalties they face are so great that they would effectively be ‘paying’ the NHS to do extra shifts. No employee, no matter how altruistic, would put up with that.

Doctors face the bizarre situation whereby the pension tax penalties they face are so great that they would effectively be ‘paying’ the NHS to do extra shifts

I do not believe that doctors regard themselves as a special case. They are happy to pay their due taxes, especially since they know that such revenue underpins the NHS. But they rightly object to the perversity and harshness of the current system.

This has arisen out of several pension changes that the Government has introduced over the past decade, along with the failure to provide sufficient resources for the NHS — a failure that has led to chronic staff shortages.

Those same changes have also led to GPs taking early retirement or cutting back on work to avoid hefty pensions taxes which make it uneconomic to continue practising.

In sum, under the complicated system that now operates, the cap on how much doctors can amass in their pension pots without being punitively taxed has fallen from £1.8 million in 2012 to just over £1 million. 

The BMA has calculated that a senior doctor working a three-and-a-half-day week could end up with an annual pension of £65,000 — which would drop to £55,000 if they continued to work a full week.

No wonder there is so much anger.

In recent days, some doctors have complained about potential tax bills on their pensions of more than £70,000. Some claim that they’ve had to remortgage homes or take out loans to meet such bills.

As a senior doctor, I recognise that many people will be cynical about such complaints. After all, a yearly pension savings allowance of £40,000 is far in excess of average earnings, while most workers can only dream of a pension pot worth more than £1 million.

It is also true that the NHS, like the rest of the taxpayer-subsidised public sector, provides far more generous, secure pension schemes than most of the private sector.

But I urge them to remember that doctors endure years of intensive training, are badly underpaid throughout their early careers and have exceptional skills that are desperately needed by our society. 

The fact is that the NHS is so admired largely because of the 24/7 dedication of its staff. And aren’t we meant to live in a meritocracy, where hard work and talent are valued rather than punished?

A few weeks ago, the Government touted an alternative scheme whereby senior doctors would be allowed to make smaller pension contributions for up to ten years in order to minimise the risk of hitting the £1.05 million limit.

But the BMA rejected this because ‘the perverse incentive to reduce NHS work will remain’ and would result in doctors receiving a smaller pension.

Yet something must be done to solve this crisis — and the only answer is a wider reform of pension rules.

We cannot go on as we are, particularly as the bedrock of the NHS is its staff.

We have seen junior doctors become engaged in one of the health service’s longest running strikes in 2013, while GPs, despite very favourable contracts, are leaving the profession in droves due to pressure of work.

Now, the crisis is affecting hospital consultants.

One of the key priorities for the next Chancellor must be a lasting resolution to these problems.

  • J. Meirion Thomas was previously a Professor of Surgical Oncology and is now semi-retired.

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