Hospital doctors’ bumper pay rise amid staff crisis

Senior doctors who opt out of NHS pension scheme could be in line for generous salary increase

Therese Coffey announced her plans for the NHS during a visit to a surgery in London on Thursday Credit: Kirsty O'Connor/PA Wire

Hospital doctors who have maxed out their pensions could get an effective pay rise, potentially worth thousands of pounds, to keep working under government plans to tackle the NHS staffing crisis.

Therese Coffey, the Health Secretary, on Thursday unveiled measures designed to retain top NHS staff who are retiring early in order to avoid punitive tax bills on pension savings.

All NHS trusts will have to offer doctors at risk of breaching the lifetime pension savings allowance the chance to take their pension contributions as cash in their payslips. 

Doctors will have to opt out of the NHS pension scheme to avoid accruing any more benefits and triggering tax bills that can run up to tens of thousands of pounds.

Rather than have a contribution worth 20.6 per cent of their salary paid towards a pension they would instead get more cash in their pay, said John Ralfe, a pension consultant. On Thursday night, it was not clear how much the NHS would pay to replace the pension.

Doctors would also not have to pay 9.8 per cent of their own wages in pension contributions.

Some NHS trusts already offer the deal, but the Department of Health and Social Care has announced that all will have to do so by next year to help “retain senior staff who have reached the lifetime allowance for tax-free pension saving”.

Madeleine Dowling, of pensions specialists Wesleyan, said the plan would not benefit all NHS staff. “While this can help some doctors manage their risk of receiving expensive pension tax bills, it doesn’t – in its current form – help GPs,” she added. 

Only staff who leave the NHS pension scheme can make use of pension “recycling”.

Dr Vishal Sharma, of the British Medical Association (BMA), said the proposals were a “sticking plaster” fix to the pension crisis and would not halt the exodus of NHS staff.

Staff who stay in the NHS pension scheme are at risk of incurring huge tax bills if their pension savings exceed either the annual and lifetime allowances because of a pay rise or increase to their hours – meaning they are effectively paying to work.

“While the Government has made important first steps in addressing the problem today, we are clear that these measures alone will not prevent doctors having to reduce their work or retire early as a result of punitive pension tax charges,” Dr Sharma said.

Ms Coffey used her Our Plan for Patients proposals to announce a £500 million adult social care discharge fund to help get patients out of hospital.

She said an international recruitment drive would be launched to hire more care workers in an effort to ease the bed-blocking crisis, telling MPs the social care sector would be given £15 million to employ extra people from abroad.

Three-fifths of patients medically fit to leave hospital last month remained stuck there because they were unable to get care support at home. 

Discharging patients to free up beds, which would in turn improve ambulance response times, was a “key challenge” for the NHS this winter, she said.

The recruitment fund is designed to help local areas apply for sponsorship visas and provide accommodation and support for overseas staff.

The Government also pledged to address variations in dental care and tackle “dental deserts”, saying it would make it easier for dentists who trained overseas to work in the NHS.

Ms Coffey told MPs the £500 million adult social care discharge fund would act as a “down payment in the rebalancing of funding across health and social care”. But trust leaders on Thursday raised concerns about the source of the new funding and sought assurances that it would not be taken from existing NHS budgets.

Matthew Taylor, the chief executive of the NHS Confederation, said: “Although it comes at the 11th hour, the Government has rightly heeded our calls to reinstate central ‘discharge to assess’ funding this winter.

“However, NHS leaders will need rapid clarification on how much of this £500 million fund is additional investment and how much is to be found from existing budgets.”

It is understood half of the £500 million will come from the money NHS employers are no longer required to pay towards National Insurance contributions after the health and social care levy was axed. The remainder is expected to come from underspending, efficiencies and savings opportunities within the NHS.

Sources warned that any reprioritisation of current funding could result in cuts to services. Charities, social care providers and councils said the fund would not “touch the sides” of what the struggling care sector needs.

Caroline Abrahams, the Age UK director, said the organisation wanted the Health Secretary to announce an immediate pay rise for care workers, adding: “Without it we remain concerned that care staff will continue to walk away, attracted by appreciably better terms and conditions in other sectors.”

Cllr Tim Oliver, the chairman of the County Councils Network, said the funding would help relieve bed-blocking but added would not fix other problems including 500,000 people on care waiting lists.

The Our Plan for Patients also set out plans for people to see a GP within two weeks, to increase the number of 999 and 111 call handlers and for 7,000 extra hospital beds to be provided by Christmas. Of those, 2,500 will be virtual, allowing people to stay home and be monitored remotely.

Ms Coffey told MPs “too few” GP practices were regularly offering appointments within a fortnight and vowed that people would be able to see how well their practice performed compared to others.

But the Royal College of GPs said it had not been consulted on the plans, and that league tables would not “improve access or standards of care”.

During a tour of a south London GP practice on Thursday, Ms Coffey said she would not apologise for the target. She also pledged to utilise other healthcare staff to help ease the burden on GPs, including pharmacists, GP assistants and advanced nurse practitioners.

Community pharmacists will be able to prescribe certain medications, such as contraception, without a GP prescription and it is hoped this and other measures will free up two million appointments.

But the National Pharmacy Association warned the investment needed to achieve such an aim was “nowhere to be seen”.

Ms Coffey also confirmed her commitment to the four-hour A&E target for people to be admitted, transferred or discharged – a target that has not been met since 2015.

She said she had recently endured a wait of nearly nine hours in A&E without any treatment but returned to a different hospital the following day and was “seen and treated appropriately”.

Forty-five per cent of all ambulance handover delays are occurring in just 15 NHS hospital trusts, she told MPs, adding: “The local NHS will be in intensive work with those trusts to create more capacity in hospitals.”

The BMA said Ms Coffey’s plan “amounts to little more than rearranging the deckchairs on the Titanic” and warned the whole system was “sinking”.

Prof Philip Banfield, the BMA council chairman, said: “If this is the Government’s grand plan for rescuing our collapsing NHS and social care system, then at best it lacks detail and at worst secures the fate of these services, meaning more patients suffering and more staff leaving.

“There are lofty ambitions and admirable principles within the plan – but little to no concrete detail on how anything will be achieved.”