|
|
 |
Black hole in NHS pensions swells to £61bn By James Chapman - Deputy Political Editor - Daily Mail, February 28, 2007 Huge pay rises for doctors and nurses have helped created a multi-billion pound black hole in the Health Service pensions scheme, MPs warned last night. The Tories seized on official figures suggesting the figure cost of funding the retirements of NHS staff has risen by £61.2 billion in just two years. That equates to three-quarters of the NHS budget for this year - and could pay for more than 120 new hospitals. Government accounting documents, slipped out yesterday almost a month later than expected, show that total liabilities for the NHS pension scheme have hit £165billion, compared with £104.2bn two years ago. The figures include an additional £2.7billion, which Government had 'accidentally' omitted from last year's accounts. In the last year alone, liabilities have increased by £37.5billion. The NHS pension fund is the largest in the public sector and its soaring liability is blamed on longer life expectancy, a recruitment drive and pay rises. Most NHS staff have received above inflation pay increases in the last few years with GPs doing particularly well. The average GP's salary is £118,000 a year. Health Secretary Patricia Hewitt admitted last month that Ministers blundered by failing to put a limit on GP's salaries. She acknowledged that the Government had not anticipated the enormous sums they now receive. Although the Health Department insists the pension liability increases are mainly due to accounting changes rather than a real increase in the projected future cost of pensions, the figures will heighten alarm at the growing burden of public sector pensions. Experts warn that future public sector pension packages will create a black hole of more than £1trillion in the public finances. That equates to a debt of £40,000 for every household in the land. The Treasury says the true liability is about half that. Tory Work and Pensions spokesman Philip Hammond said: "There's a growing pension apartheid in this country. Private schemes are winding up in droves while the taxpayer's liability for gold-plated public sector schemes is spiralling out of control. This is further proof of Labour's failure to get a grip on the soaring cost of public sector pensions. It is unbelievable that Gordon Brown in happy to continue adding billions of pounds to public sector pension liabilities while remaining silent on the plight of those who have been left to face an uncertain retirement. It is clear that Ministers completely failed to take into account the impact on pension costs when negotiating GP contracts. When someone is on a final salary pension, as doctors are, if you double their salary you have doubled the cost of their pension for the rest of their lives." The main reason for the increase is a change in the 'discount rate' - the rate used to calculate what the cost of liabilities in the future are worth today. This accounts for £18billion of last year's £37billion increase. Other major factors include a change in the assumptions for how long pension scheme members will live and an increase in the amount of pension earned. NHS pensions are not paid from the central Health Department budget. Their funds are administered by a separate body. The department accused the Tories of 'grossly misrepresenting' the position. "The figure is the total liability of the NHS Pension Scheme for all benefits accrued by scheme members for the future, and could be spread over 80 or more years.," a spokesman said. "The increase in liability looks large, but is almost entirely due to accounting changes which have no effect on the future payments due from the scheme. The key issue is that public service pensions are affordable."
If you have suggestions for additional subjects, or material to include in the pages linked to the subjects listed, please contact the webmaster.
|
|
