Making GPs work to 65 will save millions but risks exodus, report warns

By Ian Quinn

Persuading GPs to work to 65 instead of 60 could bring huge savings to the Government, according to a new report by the National Audit Office.

The report, released earlier this week as Pulse exclusively revealed the Department of Health is set to bring in progressive increases in GP payments towards their pensions from 2012 onwards, claims new pensions arrangements brought in for public sector workers in 2008 have the potential to slash the cost to taxpapers by 14% by 2060.

However, it warns that the new deal, which includes the later retirement age and shifts more costs from the taxpayer to pension members, is flawed because no steps have been taken to take into account the potentially damaging impact on motivation and retention of staff.

The DH is set to launch a major drive in January to persuade GPs in the NHS Pensions Scheme to switch to the new arrangements, despite figures to date showing it is hugely unpopular.

Accountants have warned that the move could be made compulsory with the Government seeking to make massive savings to pensions in the wake of the interim findings of the Hutton report.

The National Audit Office report says the 2008 pension arrangements, which already apply to all new GPs taking out NHS pensions, is ‘on course to deliver significant savings and stabilise pension costs around their current levels as a proportion of GDP'.

It adds: ‘The changes are also set to transfer, from taxpayers to employees, extra costs if pensioners live longer than currently expected.'

However, it says the value for money of the changes cannot be demonstrated, because the Treasury and employers did not agree the long-term role of pensions in recruitment and retention of staff.

Amyas Morse, head of the National Audit Office, said: ‘By making changes in 2007 and 2008 to pension schemes of NHS staff, civil servants and teachers, the Treasury and employers have taken some steps to tackle potential growth in costs to taxpayers.'

‘In addition to saving significant sums of money, the changes are projected to stabilise costs in the long-term around their current level as a proportion of GDP.'

‘However, the savings are being provided by public service employees, in the form of increased contributions or reduced future pensions. We have not seen a strategic assessment of the long-term impact of these changes on the motivation and retention of staff, so we cannot say that VFM has been demonstrated.'

The GPC, which is gearing up for a major battle with the Government over its plans to force GPs to pay more towards their pensions, has warned that plans to make GPs work until 65 could set off a ‘retirement timebomb'.

Bob Senior, chair of the Association of Independent Specialist Medical Accountants and director of medical services at RSM Tenon, told Pulse this week that such a move would see protests which would ‘make the student demos look tame.'