Despite the number of councillors who voted in favour of 2011’s bitter public sector pensions strike, they are joining the Local Government Pension Scheme (LGPS) in increasing numbers. In fact, the number of local government councillors who have signed up for these ‘gold-plated’ schemes rose by more than a thousand since 2008.

The schemes are often called ‘gold-plated’ by critics because councillors are privy to final salary pensions, which guarantee a percentage of their final salary as retirement income.

’Unacceptable’

While many government employees are offered these defined benefit or final salary schemes, the vast majority of workers in the private sector do not have this option when selecting their own company pensions.

Matthew Sinclair, director of the Taxpayers’ Alliance, said that these ‘retirement deals’ have all but disappeared in the private sector, so it is not fair for citizens with worse pensions to be forced to pay taxes that give privileged retirements to local government workers. In addition, the Sinclair pointed to employer contributions to these pension schemes that came in at more than £5 billion in 2010-2011.

This is ‘unacceptable’ to the Taxpayers’ Alliance head, who said that ordinary families and pensioners have seen their Council Tax nearly double in the last decade in order to pay for the bloated pensions of their councillors.

Not only have these taxes increased, but the amount that goes towards pensions has shot up as well. Bob Neil, Minister for Local Government, has said that the cost of paying for town hall pensions has ‘trebled’ since 1997, and that they now cost each household £300 per year.

Growing trend

The Birmingham City Council has the highest in pension contributions, at around £112 million. Worcestershire came in second, which had £93 million in contributions. However, the highest cost per capita was Falkirk Council, which has a £314.24 bill. Falkirk Council has said that the Taxpayers Alliance figures are ‘completely misleading.’

Nevertheless, the figures are just a small example of the growing number of voices from critics who feel that the current system is unfair to taxpayers, the vast majority of whom have riskier personal pensions and struggle keep up with rising taxes.

Sinclair also said that the need to reform the Local Government Pension Scheme is ‘urgent,’ not just because the ‘gold-plated’ schemes are unfair, but also because the rapid growth in the number of councillors joining the LGPS makes it unsustainable.

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