Scotland’s health secretary Jeane Freeman has written to the UK chancellor of the exchequer calling for decisive action in his forthcoming budget to fix the pensions tax rules that she says are undermining delivery of frontline health services in Scotland and the rest of the UK.

Faced with a significant number of experienced clinicians reducing their hours or taking early retirement rather than hand over most of their income in additional tax, the Scottish government introduced a temporary scheme in November giving eligible NHS staff the option to have their employer pension contributions – on which they were paying the penalties – paid to them as part of their basic pay.

That scheme runs out at the end of March.

In her letter to Sajid Javid, Ms Freeman says the Scottish government has put considerable effort into trying to offset “the very real consequences for NHS staff and services of UK Government tax policy”, adding that ministers will continue to do so from April if necessary.

“It is however clear that a permanent solution is urgently required,” she states in her letter to Mr Javid, “and can only be offered by your Department. It is incumbent upon you to take the opportunity of the March Budget to fully and finally remedy the situation, and allow our NHS staff to get on with delivering care without fear of the consequences. These concerns are echoed across the entire UK, and I urge you to act.”

The doctors’ organisation, the BMA, is welcoming the health secretary’s intervention.

Graeme Eunson, Chair of the BMA’s Consultant’s Committee, says she is reflecting the organisation’s serious concerns about the damage being done by the pension tax arrangements, which he says are ‘punitive’:

“The cabinet secretary is absolutely right to point out that it is incumbent on the chancellor to ‘fully and finally’ remedy the position in the UK budget in March.

“It is an inescapable fact that doctors across Scotland are having to decline extra work due to massive and often unexpected tax bills. This letter shows that reality has really hit home with our politicians and underscores the absolute necessity for tax reform, with removal of Annual Allowance when it comes to defined benefit schemes such as the NHS pension scheme. I’ve said it before, but will emphasise again that the BMA across the UK will keep pushing as strongly as we can on the need for pensions tax reform, and it is good that we have the support of the Scottish government and personally from the cabinet secretary to do that.

“We also welcome the commitment to some form of continuing mitigation from April in Scotland if the UK government fails to deliver this desperately needed reform to pension taxation for doctors. In that scenario it is vital the Scottish government continues to engage positively with the BMA to make sure the scheme in place is as effective as possible and resolves some of the limitations of the current interim mitigation scheme.”

The UK treasury has declined to comment on Ms Freeman’s letter.

Just before Christmas, UK ministers announced they were launching an urgent review of the pensions annual allowance taper as part of a drive to ensure the NHS continues to have the staff it needs to meet demand and transform care, adding:

“Treasury and health ministers will meet the Academy of Medical Royal Colleges and the British Medical Association as part of this review and the government will continue to hear evidence from other relevant professional bodies. The review will report at Budget.”