TOWN HALL STAFF PENSIONS COST HOUSEHOLDS £400 EACH IN COUNCIL TAX - OR 28% OF TOTAL BILL

FIRST PUBLISHED BY: THIS IS MONEY

GIGANTIC: 

Government Cover Up on Council Tax Bills

The plans set out by Eric Pickles's Department for Communities and Local Government that would see council staff paying bigger contributions to their own pensions would save the taxpayer £900million a year. The cost to Council Tax payers of town hall pensions went up by 3 per cent last year - at a time when local authorities were imposing cuts in services, such as bin collections and meals on wheels to reduce costs.

Families paid almost £400 from their Council Tax bills in the financial year that ended in March, to subsidise the gold-plated pensions of town hall staff, it was revealed yesterday.  Taxpayers had to find almost £6billion to maintain the pensions official accounts show a sum that swallowed up nearly 28 per cent of the Council Tax collected. 

The amount town halls paid as ‘employer contributions’ to make sure their workers get full pensions was £5,947,000,000 – four times the cost to taxpayers of council pensions. It means that every Council Tax payer is paying roughly the cost of a satellite TV and broadband subscription to subsidise the pensions of council staff. For a benchmark band D taxpayer, who paid Council Tax averaging £1,439 in England last year, the contribution came to more than £396, or £33 a month. A person with the average English Council Tax bill of £1,195, meanwhile, contributed £330, or £27.50 a month.

The remorseless rise of the cost of the pensions comes as unions threaten strikes over an attempt to make council staff pay bigger pension contributions to cut the bill to the taxpayer. The plans set out by Eric Pickles’s Department for Communities and Local Government would save the taxpayer £900million a year, or less than a fifth of the pensions bill to the public. Ministers said yesterday that the town hall pensions bill is on course to top £6billion this year and that fairness demands the workers who benefit from the Local Government Pension Scheme pay a bigger share. At present, contributions from council workers to their own pensions come to less than £2billion a year – a third of what taxpayers put in. 

Remorseless: Taxpayers paid almost £400 from their Council Tax bills last year to subsidise the gold-plated pensions of staff who work at town halls such as Portsmouth town hall in Hampshire Local government minister Bob Neill said: ‘Since, the cost of town hall pensions in England to taxpayers has risen four-fold. 'Taxpayers are now paying out more than £6billion a year to bankroll this scheme, and the cost is continuing to rise, putting pressure on front-line services and Council Tax.’ Mr Neill added: ‘The Government’s proposed reforms will save the taxpayer £900million over the next three years, whilst protecting low earners in local government.’Ministers produced a report earlier this year calling on public sector workers to pay higher contributions for keeping their lucrative pension schemes. 

Pay out: Ministers produced a report earlier this year calling on public sector workers to pay higher contributions for keeping their lucrative pension schemes It followed concern over public sector pensions, which offer much better deals than almost all that can be obtained by people working in private business and industry. Nine out of ten public sector workers have final salary deals which guarantee pensions linked to their pay packets when they retire. 

Final salary pensions have almost disappeared from the private sector. Unlike most public sector workers, local government workers do pay contributions into a genuine fund which in turn pays their pensions. But this is far short of meeting the full cost of pensions. The plan for increased worker contributions would mean that nobody who earns less than £15,000 a year would pay more for their pension. There would be a 1.5 per cent rise for workers who earn between £15,000 and £21,000, and progressively higher contributions for those earning more.  Even fat cats on more than £150,000 would not be expected to pay contributions higher than 12.5 per cent of their pay when the full contribution increases come into effect in 2015.

Unions have called strike ballots over increased contributions among more than a million public sector workers, including council staff, and plan a one-day stoppage.

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.


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