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UK council pensions cost €5bn in 2007-08

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  • UK council pensions cost €5bn in 2007-08

UK - Local authorities in the UK spent a total of £4.5bn (€5bn) in employer contributions to council staff pensions in 2007-08, the TaxPayers' Alliance (TPA) has claimed.

In the third instalment of its Council Spending Uncovered series of reports, the TPA revealed the average council spends around £9.8m on employer pension payments to the Local Government Pension Scheme (LGPS), which it said is a 7% increase from 2006-07.

The research - based primarily on Freedom of Information (FOI) requests and excluding teachers and firefighters' pension scheme where possible - showed the number of local councillors participating in the LGPS increased to 3,527; an average of nine per local authority, even though traditionally the role is meant to be voluntary and any pay is meant to cover incidental expenses.

The TPA claimed the pension contributions cost 19% of council tax revenue - equivalent to £1 in every £5 of council tax raised - and called for "urgent reform" as it warned "many schemes are facing deficits that threaten to either place new burdens on taxpayers or imperil council services".

The report, which provides detailed costs to each local authority in the UK, showed Birmingham council spent the most on LGPS pension contributions in 2007-08 with a total of £82.6m, a 9.8% increase from the previous year, followed by East Sussex with contributions of £67.2m, a rise of 13.6%, while Lancashire reported a 12.2% increase in contributions by £65.7m.

That said, the report noted North East Derbyshire cut pension spending by 31.7% £2.1m, and King's Lynn and West Norfolk saw contributions fall 28.2% to £3.3m, however while Glasgow City cut spending by 7.6% to £50.8m they were still the seventh highest spending council in the UK.

Maria Fort, policy analyst at the TPA said: "Gold-plated public sector pensions place a stranglehold on council budgets. They are unjust, unsustainable and unfair to ordinary people, many of whom have had to postpone their own retirement or seen their private pensions reduced to nothing."

"It's high time the pensions apartheid was brought to an end. Public sector pensions need urgent reform, to make the system fairer for everyone," she added.

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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