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Council tax funding pensions
Friday 29th February 2008, 11:44AM GMT.
Council taxpayers in the West Midlands are paying out millions to maintain the soaring bill for local authority workers’ “gold-plated” pensions, a shocking report today reveals.
For every £5 raised in council tax, more than £1 now goes to fund the retirement of their staff, according to figures obtained by campaigning group the Taxpayers’ Alliance. Birmingham, Britain’s largest local authority, emerges the biggest spender on pension contributions.
It ploughed in £72.6 million in 2005-06, rising to £81.8 million in 2006-07, an increase of 12.7 per cent at a cost of £81 to everyone in the city.
Staffordshire ranks 21 in a table of the top 25 big contributors in England.
Its pension contribution went up from £33.1 million to £39.8 million during the same period – an increase of 20.4 per cent, at a burden of £48 to every member of the population.
Elsewhere, across the region, the cost to each person varies from £111 in Wolverhampton – to £74 in Walsall, £70 in Dudley, £89 in Sandwell, £18 in Cannock Chase, £13 in Lichfield, £9 in Stafford, £6 in South Staffordshire, £25 in Wyre Forest and £11 in Bridgnorth.
Nationwide, overall, spending on local government pensions rose by 13 per cent last year to £4.6 billion.
The scale of the burden emerges as families brace themselves for another inflation-busing council tax increase of 3.9 per cent – taking the average bill for a Band D home to £1,370.
Taxpayers’ Alliance chairman Andrew Allum warned the most vulnerable in communities were being hurt by the over-generous provision for council staff.
He said: “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.
“The problem is clearly getting worse and requires urgent attention.”
John Ransford, the deputy chief executive of the Local Government Association, which represents local authorities in England, insisted council workers deserved good pensions.
He said: “The TaxPayers’ Alliance appears to be condemning lollipop ladies, binmen, 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,” Mr Ransford added.
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Isn’t it a case of another double standard. Government tells us all to save hard and take out a private pension. So why is it council/government workers can live off us in their retirements, its not as if they are badly paid for the jobs they do is it, because if they were they would find a better paid position.
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I cant even afford to contribute to any pension but have to pay for somebody elses in a over inflation council tax. Maybe i should just pack up working and claim for everything…….. This is so unfair
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The problem here is that there is no competition. Local councils and the government have the monopoly and can therefore dictate our council tax contributions. Why can’t all local council workers take out their own private pension like the rest of us have to?
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Rip off at the Wolverhampton Kremlin AGAIN.
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OK. Once and for all. Firstly, most of the people who work in public services are low-paid (and lots of them are women working part-time) – the Local Government Pension Scheme is a really important way of ensuring that workers in vital services get a fair deal in retirement. Secondly (@ Dave – Quarry Bank), public service workers do earn in general a great deal less than they could do for equivalent work in the private sector, and the comparative generosity of the LGPS is a part of the trade off for ensuring that we have enough people to do the essential jobs on behalf of taxpayers. Thirdly, the pension that people get isn’t a privilege, it’s something that people have worked hard to earn over a number of years, and contributed a goodly proportion of their own salary to get *as of right* on retirement. Instead of vilifying public sector workers, why not ask why it is that so many people are unprotected in retirement and have to live in penury, and why equivalent protection isn’t affordable for all?
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Is it not time that these workers made provision for themselves ? Pay them a little more and let
them sort out their own pension ! i have to We need to see a good return for our Council tax
bye the way as the financial year ends has anybody noticed that yet again the council are wasting money
on paving schemes etc to save getting their budgets cut perhaps they could pay that into the pension scheme
scheme or heaven forbid give it back to us ?
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As usual the E&S has it wrong. There is not a single Local Authority in the land paying 20% of its Council Tax take into pensions.
Did the E&S complain when the same local authorities raided those same pension funds when they thought the surpluses were fair game? Thought not.
What is happening now is that money taken has to be repaid. Local Authority pensions are self-funding except in very exceptional circumstances. They are paid for by Local Authority staff. An employer’s contribution is made as in every pension scheme.
What you should really complain about is the poor provision, for the same money, provided elsewhere.
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E&S paying too much credence to the Tax Payers Alliance, again. TPA = Spin, bias sound bite headlines.
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Well said Nick… So people believe every bit of media tripe they read… Gold plated pensions what a load of rubbish…These public sector workers have paid into their LGPS all their working life.. wake up and smell the coffee. The councils have mis-managed the money paid into the pensions schemes for years.. and are now blaming their workers for daring to retire and expecting the money THEY HAVE PAID IN… NO ANYONE ELSE..
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As a Council Tax payer myself I can understand the publics concerns about the spending of Local Authorities.
However, you have to realise that someone has to provide the services the Council does. Whether this be by the Council or a private sector company.
If it was provided by the private sector then the public would still contribute towards pensions and the like, and, as mentioned above, pay for many Council jobs pays far better in the private sector than the Council pays.
If you want to moan about the spending of Councils, then of course its yours, and everyones right. However, please realise that if you don’t pay pensions and you don’t provide the normal provisions such as bottled water then the likelihood is that the better staff will leave and service provision, to you the tax payer will decline.
The Councils are employers and the staff deserve to be treated fairly as do everyone else.
Your call !
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I am a Local Government worker within Social Care & Health, I contribute towards my pension and I would say my wages are not fantastic. I have a family and like everyone else I pay Council Tax, so I find it quite offensive for comments like “why is it council/government workers can live off us in their retirements”.
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No.5 Nick I totally agree with you – what is it pick on council workers month? Furthermore most large organisations (including private sector) offer a company pension scheme to their employees. It is not compulsory – in fact a few council workers I know opt out of paying into the pension scheme and pay into a private one.
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So whats the story then folks ?
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I’m baffled. Why, if a private company does the work, should the public still pay for pensions?
Many comapnies don’t top-up workers pensions. Its an option for companies, not a right for workers.
Either council staff get decent perks, like pension, to make up for their generally lower pay. Or they can find better jobs elsewhere, private companies can do the council work and the council tax would then be used to pay private companies to do the same work for more money.
Either way, the council tax pays.
Re No.12, Miss Opinion, a company pension scheme is actually compulsory – to be offered by companies with more than 5 staff. Normally employees aren’t forced into it.
Come to think of it, where have people got this idea of ‘gold plated pensions’. Funny really, most council workers get similar pension returns as anyone else for what they pay in.
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I see people still hold the misconception that public sector workers a generally lower paid than their private sector counterparts. This is no longer the case. Public sector pay overtook private a good 5 or 6 years ago, and by a good margin too. Combined with lower working hours and a final salary pension scheme (now rare in private sector) with HUGE employer contributions (i.e. taxpayer money), public sector workers are spoiled rotten.
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PT… you are wrong did the media tell you public sector workers are better paid…An IT consultant in the council gets nowhere near the pay their private sector colleagues get..
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No, the Office for National Statistics, CIPD and numerous independent reports. Search Google and you’ll see. Comparing one isolated role such as you have is also pretty meaningless.
PS. A quick search for the reports also gave results indicating public sector sick leave it 25% higher than private.
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Inevitably Local Government pay scales will appear to have risen as the low paid menial work has been progressively privatised leaving only the better paid positions directly employed. All that has meant is that poor pay has been made worse by the removal of the security and safeguards that compensated for it.
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No. 14 Martin dAvies – what i meant was what you said – it is not compulsory for employees to take out a company pension
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