Scotland’s NHS gravy train: part 1 – Scotland’s gold-plated public pensioners


By Kenneth Roy

Last Hogmanay was a special day in the life of Dr Charles Swainson. It was the day he retired as medical director of NHS Lothian at the age of 62. It was also the day he prepared to welcome the new year £340,000 richer – at a stroke.

This was his pension lump sum. It is doubtful if there has ever been a larger one in the history of the NHS in Scotland. Yet NHS Lothian wasn’t exactly splashing the good news around in the quiet spell between Christmas and New Year. Indeed it is necessary to dig deep into the small print of a little-read document, the board’s annual accounts, to unearth this information.

In his last year in the job, Dr Swainson had a salary of £290,000, making him the highest-paid NHS worker in Scotland. He ended his career earning more than 12 times the maximum salary of a senior nurse (£24,455). So 2010 was a reasonable year for the doc’s bank balance: between salary and that Hogmanay bonanza, he pocketed £630,000 from the public purse in 12 months.

This year, Dr Swainson began to draw his NHS pension of £115,000 a year: every year until death them do part. Almost incredibly – except this is the NHS of which we speak, so it is all too credible – this gold-plated public pensioner will have drawn just short of three quarter of a million pounds from the start of 2010, his final year of employment, to the end of 2011, his first year of retirement.

His successor, Dr David Farquharson, is already looking forward to a lump sum of £260,000 at the age of 60 and an annual pension of £90,000. Not quite in the Swainson class – yet – but another impressive example of how the NHS looks after its own.

Dr Swainson’s opposite number at NHS Tayside, Dr William Mutch, is another of Scotland’s gold-plated public pensioners. In his last year with the board, his pension pot leapt by a staggering £1 million to £2.4 million. Although not all the details have been published – some boards are more coy than others about such delicate matters – this should have entitled Dr Mutch to a lump sum of around £300,000 as well as an annual pension of £100,000.

Drs Mutch and Swainson had important responsibilities in two of Scotland’s largest health boards. The gravy train in the smaller boards is a more modest carrier offering its passengers less spectacular rewards, but nor are the benefits to be sneezed at – if only to prevent another bout of NHS hysteria over swine flu.

NHS Shetland serves an island community of 22,000 souls. It is well known to regular readers of the Scottish Review as the public body which consistently thwarted our requests for details of the remuneration packages of key executives. We were told at one point in our long campaign that we had no genuine interest in obtaining the figures. The Scottish information commissioner took a different view in a landmark judgement in our favour, since when there has been much greater transparency throughout the NHS in Scotland.

This year has seen the departure of two of NHS Shetland’s senior managers. Chief executive Sandra Laurenson left at the end of January, but the retirement of the medical director, Dr Ken Graham, at the end of August is of more interest. His pension pot entitled him to a lump sum of around £100,000, and his salary in the final 12 months of his employment was a whopping £175,000. So, between September 2010 and August 2011, Dr Graham received around £275,000 – equivalent to £12 for every man, woman and child in the Shetland islands.

Another small board familiar to regular readers is NHS Forth Valley, which signed up to a controversial £1 billion+ PFI deal for the new hospital at Larbert. (The robots who work there performing menial tasks once done by human beings recently won an award. Whether they collected it – in person, so to speak – we are unable to say). It will be many years before the true cost of this financial speculation, so advantageous to the board’s private sector partners, can be assessed. Meanwhile, the senior management responsible for the deal can look forward to a more than comfortable retirement.

NHS Forth Valley, once one of the least transparent health boards in Scotland, candidly lays out the figures in its latest remuneration report. When she retires, chief executive Fiona Mackenzie – Professor Mackenzie as she is now known – will pick up a lump sum of £155,000 and an annual pension of £55,000. Director of public health Anne Maree Wallace will do slightly better with her lump sum of £165,000 and £55,000 a year. Someone called Iain Wallace, whose job title is unspecified in the accounts, will leave with a lump sum of £160,000 and £55,000 a year.

In the political row over public sector pensions, and Britain’s ability to go on paying them in the same way, it is easy to overlook such high-end minorities as the NHS’s sizeable (some would say bloated) senior bureaucracy with its ability to manipulate the final-year pension scheme to its own advantage. There are several recent cases in Scotland of executive salaries being inflated just before retirement by as much as £35,000 a year; these spectacular hikes in the final months of careers are routinely explained away as making up for ‘underpayments’ or ‘arrears’ from previous years.

A final thought for today. The beneficiaries of these gold-plated pensions could argue – and often do – that they have contributed to their own retirement. They have in a small way – by between 5 and 8.5% of their stupendous salaries. The rest, however, comes from you.

Tomorrow: part 2 of Scotland’s NHS gravy train


Courtesy of Kenneth Roy – read Kenneth Roy in the Scottish Review