Pensions 'taking up' council tax

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Rises in council tax are being taken up by the rising bill for workers' pensions, a campaign group says.

A report by the Taxpayers' Alliance says spending on local government pensions rose 13% last year to £4.6bn.

For every £5 in revenue raised by local authorities, more than £1 now goes to fund staff retirement, it says.

The Local Government Association (LGA), which represents councils in England, insists that council workers deserve good pensions.

The Local Government Pension Scheme (LGPS) is still being linked to final salary and allows many employees to retire early with full benefits.

Taxpayers' Alliance chairman Andrew Allum said other parts of society were being hurt by the over-generous provision for council staff.

This is a fair and affordable pension scheme for local government workers, which is also fair to taxpayers Department for Communities and Local Government

"It's unacceptable that ordinary families and pensioners who struggle to pay inflated council tax bills see so much of their money spent on gold-plated council pensions that have all but disappeared in the wider economy," Mr Allum said.

"The problem is clearly getting worse and requires urgent attention.

"Councils should start correcting their own behaviour immediately and the government must face down union pressure and reform the outdated local government pensions scheme as soon as possible."

The researchers used freedom of information laws to obtain copies of annual accounts from 98% of councils in England and Wales.

They found the average local authority spent £10m on pension contributions in 2006/07 - up 13% on the previous year.

LGA deputy chief executive John Ransford said: "The Taxpayers' Alliance appears to be condemning lollipop ladies, bin men, street cleaners and librarians for getting a pension worthy of the years of service they have given helping local people.

"The Local Government Pension Scheme recently underwent a radical overhaul, which provides greater value for money to the taxpayer while at the same time recognising the invaluable work that council staff do to make the lives of local people better."

Impending reform

Shadow local government secretary Eric Pickles said the government was "adding insult to injury by making hard-working families and hard-pressed pensioners pay towards the soaring cost of gold-plated town hall pensions".

But the Department for Communities and Local Government said: "This is a fair and affordable pension scheme for local government workers, which is also fair to taxpayers."

Brian Strutton, national officer of the GMB, said: "It's a shame the Taxpayers Alliance didn't do their homework.

"They ask for a reform of local government pensions oblivious to the fact that a new scheme starts in April.

"All their facts - which are misrepresented anyway - are based on historic data from the old scheme.

"The new scheme from April will see councils paying less and council workers paying more."