£2.8 billion shortfall in council pensions

The full extent of the black hole in West Midland council pension funds was revealed today as a staggering £2.8billion.

Nationally the deficit has risen to £53bn from £42bn the previous year.

While some councils in the region have reduced their deficits over 12 months, others have seen the amount their funds are short get worse.

Staffordshire County Council's deficit in the 2008/9 financial year was £476.7m, £194.4m worse than the year before. Bosses today claimed the fund has since improved.

Birmingham City Council had the largest deficit, of £1.05bn in 2008-09. But that figure was £87m better off than the year before.

The councils of the West Midlands participate in the West Midlands Metropolitan Authorities Pension Fund, administered by Wolverhampton City Council.

Wolverhampton Liberal Democrat councillor Mike Heap today defended the fund and said there had always been more being paid in than out.

He said there was "no need to worry" and that it would return to a surplus over time. He added: "Some would say there is a concern about our ageing population but that is not going to affect the fund for many years."

Staffordshire's fund is managed by Staffordshire County Council. Its leader Philip Atkins said: "Pension deficits are a theoretical calculation and the pension fund will not need to be used to pay pensions for a number of years. The most up to date figures show a marked increase in the value."

The figures were obtained by the the Taxpayers' Alliance, which today claimed the funds will end up being bailed out using public money.

John O'Connell, policy analyst at the Alliance said: "These deficits are a huge ticking time-bomb."