Treasury to cut early retirements

13 Jul 00
The Treasury has ordered drastic action to curb unacceptably high levels of ill-health retirement among public sector workers that cost taxpayers £1bn a year in pensions.

14 July 2000

A report published by Treasury chief secretary Andrew Smith has found that the number of early retirements on health grounds in the public sector, at 22,000 annually, is a third higher than for private companies.

It also revealed wide variations between different public services and even within the same sector. In some areas, up to 93% of firefighters took early retirement. The overall figure was 60%, compared with 39% of local government workers, 25% of teachers and 22% of civil servants.

'Levels are higher than they should be and we are determined to bring them down,' Smith said. 'The variations in rates between sectors, and between employers in the same sector, is so significant that there is clearly scope to bring the rate down,' he added.

Smith has told each government department to draw up an action plan, and service delivery agreements relating to next week's spending review will set targets to reduce the pensions bill. He has also set out 36 recommendations to promote more rigorous medical assessments and limit the availability of ill-health retirements.

The new guidelines stipulate that workers unable to continue their present duties should be redeployed to less physically demanding jobs, with only those unable to do any work at all considered for ill-health retirement.

But union leaders have accused the government of a 'slur' against public sector workers and of trying to blame them for inadequate funding of services.

Unison general secretary-elect Dave Prentis said the government was trying to divert attention away from the real issues. 'It is no coincidence that the government is trying to make the most of this story just in advance of the comprehensive spending review where we are asking for more resources to be pumped into our public services.'

Nigel de Gruchy, general secretary of the National Association of Schoolmasters/Union of Women Teachers, said ill-health retirements among teachers had fallen by more than half to 2,100 between 1997 and 1999.

'Constant government reforms backed up by unrelenting pressure to improve results and cope with ever more disruptive pupils inevitably results in some casualties,' he added.


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