Accounts showing NHS £156bn pension gap delayed again
The Labour government is under mounting pressure from to publish accounts which are set to reveal that the NHS's pension liabilities have rocketed to £156bn – an increase of one third in just two years. The 2005-06 accounts for the pension scheme for nurses, doctors and other health workers are already almost five months late and civil servants have told The Sunday Telegraph the document is now unlikely to be published until the end of January.
Business is increasingly angered by the spiralling liabilities of unfunded public-sector pension schemes — the biggest of which is the NHS scheme — which come as private-sector companies are spending heavily to bring their deficits under control.
The total liabilities of publicsector pensions now exceed £960bn – compared to around £800bn for all private-sector schemes, most of which are funded by assets, such as equities and bonds. However, public-sector schemes will have to be funded by future tax receipts.
Many companies have already raised retirement ages or poured money into their funds. Only last week British Airways announced plans to put an extra £300m into its scheme.
David Frost, the director-general of the British Chambers of Commerce, said: "The huge cost of public-sector pensions is one of the biggest issues facing this country and the government is doing nothing to address it. It is totally unfair that the burden of pension reform is being left to the private sector."
Frost called for the Government to look again urgently at raising retirement age of state workers from 60 to 65.
The total size of the NHS's scheme liabilities has risen sharply due to a big recruitment drive in the public sector, pay rises and longer life expectancy.
Using previous accounts, leading actuary Watson Wyatt has calculated that the total liability grew from £128bn to £156bn in the 12 months to March. Stephen Yeo, senior consultant at Watson Wyatt, criticised the way in which the Government reports its pension liabilities. "Public-sector pension liabilities have ballooned in recent years with only token attempts to control them," Yeo said.
"The very least we should expect is that the liabilities be reported in a prompt and accessible manner. But it seems that the figures for the largest scheme will be late and released in a manner designed to minimise their impact."
The late filing of the NHS pension accounts raises more questions about the Government's financial management. Last week, the National Audit Office refused to sign off the Department for Work & Pensions' accounts. The Home Office's accounts for 2004-05 were filed late and had to be re-written after the NAO identified "material omissions, mis-statements. . . numerous errors and internal inconsistencies".
The NAO told The Sunday Telegraph last week that the Home Office has also failed to file its 2005-06 resource accounts, which were due at the beginning of July. The same is also true of HM Revenue & Customs' prosecution office.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/11/19/cnnhs19.xml
Earlier this year (Feb 27) Health Direct warned that the unfunded black hole in NHS pensions schemes grows to £26.8 billion. Experts said the increase showed that the public sector pensions bill was growing at an alarming rate and they questioned why the Government's policy is not to set aside money now, but to pay the bill from future taxes. By failing to make provision now the final bill will spiral.
The black hole in public sector pensions is almost four times larger than originally estimated, Whitehall accounts show. This follows a change in the way the Government works out the cost of its retirement schemes. Government documents show that since last year the amount of annual provision needed for public sector pensions has risen from £24.2 billion to £81 billion. For the NHS the Treasury figures disclosed that the provision for the NHS pension scheme this year is some £26.8 billion, rather than the £7.8 billion in the previous year's figures.
Business is increasingly angered by the spiralling liabilities of unfunded public-sector pension schemes — the biggest of which is the NHS scheme — which come as private-sector companies are spending heavily to bring their deficits under control.
The total liabilities of publicsector pensions now exceed £960bn – compared to around £800bn for all private-sector schemes, most of which are funded by assets, such as equities and bonds. However, public-sector schemes will have to be funded by future tax receipts.
Many companies have already raised retirement ages or poured money into their funds. Only last week British Airways announced plans to put an extra £300m into its scheme.
David Frost, the director-general of the British Chambers of Commerce, said: "The huge cost of public-sector pensions is one of the biggest issues facing this country and the government is doing nothing to address it. It is totally unfair that the burden of pension reform is being left to the private sector."
Frost called for the Government to look again urgently at raising retirement age of state workers from 60 to 65.
The total size of the NHS's scheme liabilities has risen sharply due to a big recruitment drive in the public sector, pay rises and longer life expectancy.
Using previous accounts, leading actuary Watson Wyatt has calculated that the total liability grew from £128bn to £156bn in the 12 months to March. Stephen Yeo, senior consultant at Watson Wyatt, criticised the way in which the Government reports its pension liabilities. "Public-sector pension liabilities have ballooned in recent years with only token attempts to control them," Yeo said.
"The very least we should expect is that the liabilities be reported in a prompt and accessible manner. But it seems that the figures for the largest scheme will be late and released in a manner designed to minimise their impact."
The late filing of the NHS pension accounts raises more questions about the Government's financial management. Last week, the National Audit Office refused to sign off the Department for Work & Pensions' accounts. The Home Office's accounts for 2004-05 were filed late and had to be re-written after the NAO identified "material omissions, mis-statements. . . numerous errors and internal inconsistencies".
The NAO told The Sunday Telegraph last week that the Home Office has also failed to file its 2005-06 resource accounts, which were due at the beginning of July. The same is also true of HM Revenue & Customs' prosecution office.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/11/19/cnnhs19.xml
Earlier this year (Feb 27) Health Direct warned that the unfunded black hole in NHS pensions schemes grows to £26.8 billion. Experts said the increase showed that the public sector pensions bill was growing at an alarming rate and they questioned why the Government's policy is not to set aside money now, but to pay the bill from future taxes. By failing to make provision now the final bill will spiral.
The black hole in public sector pensions is almost four times larger than originally estimated, Whitehall accounts show. This follows a change in the way the Government works out the cost of its retirement schemes. Government documents show that since last year the amount of annual provision needed for public sector pensions has risen from £24.2 billion to £81 billion. For the NHS the Treasury figures disclosed that the provision for the NHS pension scheme this year is some £26.8 billion, rather than the £7.8 billion in the previous year's figures.
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