Thursday, 3 April 2008

Now, it's 'fat cat' council pensions in the watchdog's spotlight

PENSIONS for local council staff are costing every West Somerset resident a total of £62, a startling new report by local authority watchdogs the Taxpayers’ Alliance has revealed.
Information obtained by the alliance using the Freedom of Information Act shows Somerset County Council increased the money it spent on pensions for staff from £20.64 million in 2005-06 to £24.332 million in 2006-07 - a huge 17.9 per hike in just one year.
The Liberal Democrat-run county’s pensions bill alone was £47 for each person in West Somerset.
On top of this, each resident was forking out another £15 for pensions at cash-crisis West Somerset Council, although its spend actually fell by 13.5 per cent from £615,000 in 2005-06 to £532,000 in 2006-07.
The news comes just two months after The Post reported a Taxpayers’ Alliance investigation which showed the number of County Hall ‘fat cat’ officers earning more than £50,000 a year had skyrocketed by 1,200 per cent from just nine in 1997 to a staggering 111 by last year – costing each West Somerset resident £13.64.
The cost of pensions at neighbouring Taunton Deane Borough Council rose by a huge 46.6 per cent from £1.66 million in 2005-06 to £2,434 million in 2006-07, which amounted to £23 per person.
Sedgemoor District Council increased its pensions funding by 23.2 per cent from £1.6 million to £1.973 million between 2005-06/07, costing each resident £18.
Nationally, the average council now spends more than £10 million on employer pension payments - a 13 per cent increase on the average amount spent in 2005-06.
In 2006-07, local authorities across the country spent a total of £4.6 billion on employer contributions to the Local Government Pension Scheme and unfunded payments and added years benefits to local government employees, teachers and fire
Fighters - representing 21 per cent of council tax revenue or £1 in every £5 of council tax.
TaxPayers’ Alliance chairman Andrew Allum said: “It is 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.
“With pension costs jumping 13 per cent in one year, 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.”
Mr Allum said urgent reform of public sector pensions was ‘clearly essential’ in order to reduce the bill to taxpayers, free up money for services, and avoid a serious crisis in public sector pension funding in the future.
He said at present many councils added extra years to an officer’s pension to allow them to retire early.
“In other words, it is possible for certain council employees to retire at age 55 and immediately draw on a pension as if they had retired at age 60,” he said.
Mr Allum said added years benefits was a practice which should cease immediately.
He said at the same time as increasing their spending on pensions for staff, many local authorities were raising council tax and at the same time cutting services such as rubbish collections or care for the elderly.
Local Government Association 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.
“Councils provide more than 800 different services for local residents and these cannot be delivered by robots or machines.
“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.
“According to the Treasury, councils are the most efficient and effective part of the public sector, and the independent Audit Commission has recently said that councils are delivering better services than ever before.”

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