Time to ask what the people will stand: striking GPs have it all ways

GPs and their hospital-based colleagues are striking this Thursday – 21st June – over changes to pension rights that would see younger doctors working to the age of 68 – the new state retirement age for everyone – and pay higher contributions.

The big question is not why younger doctors should not fall into line – with the pensions at the end of the process generous ones. Some get up to £50k per annum.

The real question is why many of our GPs are getting an NHS pension in the first place.

We sent this question to NHS Highland this morning:

‘We are unable to understand why GPs are amongst those prepared to strike on pensions issues.

‘GP practices are now almost universally serviced through what are business contracts – they apply on that basis, are considered against those criteria and are awarded contracts on service delivery.

‘This is very different from the earlier situation where individual GPs were appointed as employees of a health service.

‘We do  not understand why, then, GPs appear to be given NHS pensions.

‘They are considered as self-employed, they are  businessfolk.

‘We would expect that their pensions would therefore properly be their own concern.’

We received the following carefully worded reply:

‘I can tell you that GPs have been part of the NHS pension scheme since 1948 however in terms of answering your question I have been advised that you would be better putting your call through to the BMA who should be able to advise / point you in the right direction.’

We did exactly that – repeating the question verbatim to BMA Scotland and letting them know what NHS Scotland’s response had been.

We have now received this response from BMA Scotland:

‘As NHS Highland have explained, GPs have been a part of the NHS pension scheme since 1948.  GPs are independent contractors and the terms of their contract includes membership of the NHS pension scheme.’

We can understand why, at the point where delivery of primary health care changed to an arms length service treated as a private sector business contract, those GPs who were already members of the NHS pension scheme should, in fairness, have been allowed to remain in it until their retirement.

There is, however, no defensible reason why new entrants to the profession following that change of delivery method should ever have been given NHS pensions.

This was clearly the power of special interest lobbying by the BMA at work in the face of government either weak or desperate to shuffle of as much responsibility as possible, whatever the cost and the logic of the cost.

GP contracts are already feather bedded. The responsibilities they carry are far less that they once were. The number of add-ons – of which the NHS pension benefit is one, underlines the grandiloquent carelessness our culture has been taught to accept in dealing with public money.

Where GPs fail to deliver what they promise on the award of a practice contract, there is little that can be – or is – done to redress such a situation. And there are no changes  made to the financial terms of the contract.

Last month’s ballot of 104,000 members by the BMA returned a majority of around 4-1 in favour of the strike action proposed for Thursday. (And by the way, they will still be paid for the day because they are available for emergencies.)

4-1 is no narrow majority but a very substantial one.

Since then it is said that many are changing their minds, faced with the nature and volume of public disgust.

Today’s (19th June) Daily Telegraph quotes an MP – Conservative Sarah Wollaston – who is a former South Devon GP, as saying that ‘scores’ of doctors have told her that they are now unhappy: ‘I’ve had quite a few doctors contacting me saying “I did vote for action, because I wanted to express that I’m not happy with the pensions deal, but I’ve no intention of striking.” When it comes to the crunch, it will be a minority of practices that take action. Some doctors thought it was “madness” to take industrial action over pensions. Once you lose the public’s trust, it’s difficult to get it back.’

One can only hope that once the public wake up to the reality of this situation, it may be difficult to get the pensions back, never mind the trust.

Self-employed businessmen in other fields have to make their own pension arrangements and expect to do so.

GP practice contracts are not time specific.They are open ended.

The contract holder may normally continue to operate the practice for any length of time, without compulsion to retire.

There is nothing to stop a GP business with such a contract – if they do as other business people do and sort out independent pension arrangements – in turning in their contract at any age they like, younger or older and living on the considerable profits they will have made from the practice, in addition to their private pension.

This country, Europe and well beyond it are, in reality, facing potentially the worst recession we can remember with what is now widely accepted to be the inevitable collapse of the euro.

In Greece there are middle class professionals who cannot afford to eat and who are going to soup kitchens – with the Greek Government-to-be talking, unbelievably, about putting up VAT on food.

The British economy – which will be far from immune from the consequences of what is coming, even though this country is not a member of the eurozone – may avoid the worst excesses of the disaster of where Greece is today, but it will not avoid it all.

We predict that the medical profession will fear more to lose what it should not have than go all out to grab what is denied to others – and that the strike will fail to impress government.

Regardless of however strong or faux-responsible the doctors look on Thursday, government should demonstrate the resolve to play fair by taxpayers and the average working person – and make sure that no NHS GP contract from now on includes the indefensible  goody-bag of an NHS pension.

Note: NHS Highland later described to us the GPs stance on pensions thus:

‘GP’s pay (Superannuation) into the NHS Pension scheme. The scheme is administered by the Government, the Government is altering the terms of the scheme. GP’s like all members of that pension scheme have a right to object to any change to that scheme.

‘They would first negotiate and then if required take industrial action against the scheme administrators, (not the patients or NHS Highland), to allow their views to be heard.

‘The concept is that GP’s are in a dispute with the administrators of their pension scheme, in this case, the government.’

This is useful information.

It does not make any impression on the issue that many current GPs should not, as self-employed private sector businessfolk, be given NHS pensions.

We are now interested to discover how many other areas of responsibility blurred between past and present practice, see private sector business employees on Whitehall pensions. Defence?

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18 Responses to Time to ask what the people will stand: striking GPs have it all ways

  1. Are the GPs’ pension schemes contributory? (in which case the issue is at the margins) or are their contracts like civil servants non-contributory? (in which case, I agree there is an issue here and ranks up with lots of other benefits medics get – such as Consultant “A list” supplements.)

    The big elephant in the room of course is the possibility that all medics leave the NHS and we end up with a private heath service (that, going by the experience in the USA, will be much, much more expensive than the NHS even with these perks).

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    • They are contributory (see note added to the foot of the piece) but these pensions are pretty generous and relatively cast iron in comparison to private sector packages. In these days that’s worth a lot.
      One thing is certain, if access to this scheme had not been to doctors’ decided advantage, the BMA would not have fought for this arrangement.

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    • Just a couple of points of factual information:

      Civil Servants pensions are contributory as are teachers, local authority workers and the NHS pension scheme.

      Also last year the Health Service pension ‘scheme’ was in surplus and contributed around £2bn to the treasury.

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      • Thanks for pointing out that civil servants pensions are now contributory – albeit at a very low rate (less than 4% at the highest levels). They, of course, always had a widows and orphans contribution of 1.5%. The classic pension is still a final salary scheme so much better than pretty much anything available in the private sector.

        The point about the Civil Service pension scheme is that it is not fully funded so future tax payers have to pick up the tab.

        I completely agree that we have to be careful about separating out the Civil Service Pension schemes from that of other public sector workers, most of whom have fully funded, contributory schemes.

        Back to the medics: is their scheme fully funded or not?l Probably yes, in which case our only concern is whether the employer (ie our) contribution is proportional to the benefits produced.

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        • The NHS is a PAYG scheme which is funded by the taxpayer and member contributions. There is no capital fund behind the scheme.

          I don’t know how the GP’s commissioning will work but it has the potential to be very expensive (doctors move along to become managers which allows more doctors to come into GP?)

          The medical colleges have been shafting the taxpayer for 250 years and for once a government, Lansley, called their bluff.

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  2. Excuse me but we would not be having these problems if the bankers had not acted fraudulently and recklessly. Have we all forgotten the twisted bankers, why have none of them gone through our court system why are they not locked up behind bar like all other conmen?
    I have never supported unions or strike action but now I think there should be a three day strike action by everyone to show the government who is the majority and who has the largest voice.
    They played the UK people as fools by claiming a fuel shortage and strikes the public fell for it and guess what the government made a shed load of money through increased fuel sales. Now think if the people said stuff you we are having three days off every month from now till Christmas

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  3. Pingback: Fewer than 25% of GP surgeries will join industrial action, survey says – The Guardian | Lenta Asia

  4. Nearly all the pension schemes of public sector workers are not fully funded (I believe the Local Authority worker’s scheme is funded) but are schemes where the ‘agreement’ was that when a scheme was in ‘credit’ money would be paid to the Treasury and when it was in ‘deficit’ the Treasury paid money in, to make up the shortfall.
    All the schemes have, in the past, contributed large amounts to the Treasury. In fact in the 70′s and early 80′s the teaching unions campaigned for the Teacher’s Pension scheme to be made fully funded but no Government, of either party, wanted to lose what was seen as a good source of revenue. Remember, last year the NHS scheme contributed around £2 billion to the treasury.
    Also for the last 5 years no new entrant to the Civil Service has been able to access a traditional final salary scheme.
    It is worth bearing in mind that the NHS scheme is not the only scheme to allow entry to those not public servants. Teachers in independent schools can be (and are) members of the teacher’s scheme. Again no Government wanted to change this arrangement. The Tories were concerned that it would make recruitment of teachers to independent schools more difficult and Labour didn’t want to ‘lose’ the income provided by the independent school teachers who were generally paid a higher salary.
    It is very easy to fall for the Government’s propaganda on this matter without thinking through the realities of the situation. Once a final salary pension scheme is closed to new entrants (as nearly all public schemes have been for 5 years or so) then it will quickly become much more ‘expensive’, as no new contributors will be added but the existing accrued pensions will need to be paid.
    The majority of public servants did not want these unfunded schemes but whilst they contributed surpluses to the treasury no Government wanted to lose them. Now, when some of those contributions given to the treasury should be ‘paid back’ they find there is an orchestrated campaign to vilify public servants who have these ‘gold plated pensions’. Remember the average NHS pension currently being paid is around £6,500 and the average Civil Service pension in 2010 was £5,928.
    I know I’m old fashioned but if we are concerned about those who are getting large pensions then perhaps we should resurrect the additional ‘unearned income’ tax?

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    • Thanks for that BFOandC – though it depresses me further with the thought that our public sector pension liability is even higher than I imagined.

      There is a good article on this here:

      It confirms that the only major public service pension fund that has capital behind it is the Local Government Workers scheme.

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      • Thanks for the link – I hadn’t read it. I noticed particularly the claim (not contested) that the Teacher’s Pension scheme alone had contributed over £40 billion more than it has paid out. This underlines the point that various Governments were happy to use the schemes as revenue providers in the ‘good times’ but are now unwilling to fund them in the ‘bad’.
        People should not blame public servants for the need now to fund pensions but successive Governments who used public servants contributions as an annual additional revenue.

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        • This is quite dreadful stuff BFOandC. The average teacher’s pension is £10,858. There are almost as many pensioners, 567,000, and dependants as there are active members. The total contribution is 20%; the member pays 6 and the local authority 14%.

          To contribute more than is being paid out annually, today, the contribution from each teacher must be £10,000 which is 20% of salary or, therefore, each teacher is paid over £50,000. Is that likely?

          That is only half the story because future liabilities are enormous. Many government pension schemes had, some still have, very favourable benefits. The actuarial position whilst membership was growing with few liabilities encouraged profligacy on an eye watering scale. The fireman’s pension scheme is an example. Eventually, they get caught.

          The current capital liability of the average teachers pension in payment is approximately £0.4m (many retired at 60 or less) and thus the sum total is no less than £200bn or 15% of UK GDP. The future liability is going to be very much greater; I’ve no idea by how much because the liabilities are currently discounted against sovereign debt which is very, very low – the Government Actuary uses arcane techniques not available to the private sector to take a measured long term view (complete bollocks, of course).

          There are a few people who understand just how bad a deal the doctor’s pension is for the taxpayer. We’re inured to the offensiveness of it. It’s been going on since the end of WWII so what? Nobody’s listening or are protecting their own legalised piece of theft from the public purse, particularly the BBC. ForArgyll deserve a great deal of credit for this article.

          Some of the recent data is here

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          • It is really dreadful stuff that (as your link makes clear) Governments refused to make the Teacher’s Pension scheme a fully funded scheme.
            I am also (perhaps wrongly) very suspicious that the Government has refused, as part of their current changes to pension arrangements, to have an independent valuation of the teacher’s scheme.
            That suspicion is confirmed when your link quotes a National Audit Office report in 2010 that following the changes made in 2007/8 ‘overall costs to taxpayers will stabilise at around 1.0 per cent of GDP, close to their current levels.’

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  5. You know what’s “offensive” HansBlix?
    Your,and the UK govs. faux outrage at public sector workers pensions.

    Give me a break! There are countless bankers,hie heed yins sitting on obscene ammounts of dosh with much of it gleaned legally or illegally, depending on your definition,from the hoi polloi of the world. Cheating and sneaky deals are what is going on. Has anyone been convicted of fraud with regard to the banking collapse? NO! and with no sign of any recourse in the pipeline either.

    So, I will be backing ALL public sector workers and damn anyone who accuses them of “..theft from the public purse…”. Sheer hyprocracy.

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      • Ah! Herr Blix= the spelling police. More important than breaking a contract??
        for e.g.

        I agree a contract with you to sell X goods for X money.
        The invoice is sent, as agreed, but you now tell me the contract is to be renegotiated!
        Furthermore, you DO NOT tell me WHY. So, no option for me to understand the reasons, or argue my case.

        This is what is happening NOW to public sector pensions.
        How “two-faced” can this UK gov. be??????

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        • Morag, the contract analogy is interesting, because if circumstances or the specifications of the goods change then the contract is renegotiable.
          The pensions offers were originally made on a set of assumptions, life expectancy being one of them.
          The government should honour it’s side of the original offer by paying full pensions, provided the public sector workers honour their side and die at age 76.

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  6. If GP’s are classed as self-employed then they should have a defined contribution pension scheme instead of a defined benefit pension scheme.

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