Pensions and capital progress but there is still unfinished business | Danny Mortimer

Danny Mortimer

It cannot have escaped your attention that this government and new Prime Minister are eager to show some love to the NHS. And that must be positive news for the service, regardless of your political persuasion, writes NHS Confederation deputy chief executive Danny Mortimer.

With Boris’s feet barely under his desk, we took the opportunity to write to him to tell him about the burning issues that should be at the top of his priority list. The NHS Confederation – encompassing NHS Employers, NHS Clinical Commissioners, the Mental Health Network and the Independent Healthcare Providers Network – joined forces to put together a letter and a briefing for Mr Johnson which said that major areas of health are unfinished business and need urgent action.
These included supporting the NHS on its decade-long journey towards an integrated health and care system as well as delivering extra investment for new buildings and infrastructure, social care and addressing major gaps in NHS staffing - including bringing an end to the pensions fiasco.
And, to give credit where it is due, we did not have to wait long to see some action, with last weekend’s boost to capital spending and infrastructure upgrades and the announcement of a new public consultation on pensions which proposes full flexibility over the amount senior clinicians pay in.

Pensions pressure pays off

The issue with the pensions annual tax-free allowance (and especially the associated taper) has been wreaking havoc with some senior doctors reluctant to take on additional work following punitive tax demands with an obvious effect on patients at a time when one in six households has someone awaiting an operation. It has also been impacting on senior leaders and complicating their efforts to recruit and retain board colleagues.
The NHS Confederation has been firmly making the case for change both privately and publicly with politicians and arms-length bodies for a long time. In particular my colleagues at NHS Employers were the first to publicly call out the scale of the problem in their evidence to the Review Body on Doctors's and Dentists' Renumeration at Christmas. This followed the steps to mitigate the impact of the changes, including making local clinical excellence awards non-pensionable and extending the scheme pays option, which allows staff to ask the scheme to pay their tax charge to HMRC from their pension pot.
And at the end of last week, our chief executive Niall Dickson called on the Chancellor to scrap the taper applied to the annual allowance altogether, as reported exclusively by the Financial Times.
The announcements which followed on Sunday and on Wednesday lead though to mixed feelings.
The focus on addressing the concerns of doctors does of course recognise the problems for clinical services leaders have been flagging to us. At the same time it leaves a bitter taste for other members of the team who may themselves have faced unexpected tax bills or who can’t afford to be in the pension scheme.
We welcome the commitment from the Treasury to review the tax regime applied to pensions: all the indications over the last year were that this wouldn’t be countenanced, so it is positive that there will be a review. We will continue to repeat Niall’s clear message on the removal of the taper and hope that the review isn’t an exercise in kicking the issue into the long grass. Clearly the present political uncertainty is a factor, and we will brief opposition parties on our position also.
Working with the DHSC and NHS England/Improvement, NHS Employers will provide guidance which helps you apply the Prime Minister’s ‘permission’ to recycle pension contributions as salary, and will also provide guidance on steps which might be taken to avoid colleagues having to leave the pension scheme.
We certainly support the greater flexibilities to allow clinical members of the NHS Pension Scheme to control the value of their pension growth and believe it will have a positive impact on NHS service capacity and patient care, particularly if the tax regime doesn’t change or only improves in part. Clearly, however, the proposed benefits should be available to everyone on the NHS pension scheme and not just doctors and other clinical staff.
We will, of course be seeking member views on these proposals as we prepare a full and formal response to the consultation and you should feel free to contact me at

Capital fix

To say the capital investment is desperately needed to modernise services and working environments and improve the quality and efficiency of patient care would be an understatement. In our recent member survey, more than eight in 10 front-line health leaders said that a lack of NHS capital investment has inhibited the ability of local health systems to deliver the goals of the NHS Long Term Plan.
In our response to the announcement on Monday, we made clear that the money would be welcomed but was clearly insufficient. Others commented more expertly on the newness of the money involved, but we know from your feedback how welcome the news was for those organisations who benefited.  Indeed, I spent time on Tuesday with Dame Jackie Daniels and the team at Newcastle-upon-Tyne Hospitals and they were clearly delighted with the capital investment that they were now able to make in their paediatric cardiac services.
The key issue remains that what was announced was very far away from enough. The HFMA has estimated the cost of eradicating backlog maintenance at £6 billion in 2017/18, up from £4 billion in 2011/12.  According to the Health Foundation’s analysis just bringing the UK up to the OECD average number of MRI and CT scanners would require more than £1.5bn in extra capital spending. So clearly this extra money – new or not – will not magically solve all of the problems with our creaking infrastructure, but that does not mean we should not be welcoming while continuing to make the case for further investment.

Danny Mortimer is deputy chief executive of the NHS Confederation and chief executive of NHS Employers. Follow Danny on Twitter at @NHSE_Danny.

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