Councils pay £5bn in staff pensions
A report suggested more than 4,500 councillors are enrolled in pension schemes at the authorities where they serve
Local councils paid £5.175 billion in contributions to employees' pensions last year, according to a new report.
The TaxPayers' Alliance (TPA) calculated that the contributions equate to £1 out of every £5 gathered in council tax.
As council tax represents only about a quarter of local authorities' income, the proportion of spending going on pension contributions is likely to be closer to about £1 out of every £20. The report also suggested that more than 4,500 former councillors are enrolled in pension schemes at the authorities where they serve.
The TPA found that numbers are rising, even though serving on a council has traditionally been regarded as a voluntary activity and not a job. In 2010/11, 4,548 councillors were enrolled on the Local Government Pension Scheme (LGPS), an increase of more than 1,000 since 2007/08, when the figure stood at 3,527.
According to the TPA's figures, Birmingham City Council spent the most on employer pension contributions in 2010/11, at more than £112 million. The council in Scotland with the highest employer contributions was Fife at £56 million, while in Wales it was Cardiff with £32.9 million and in Northern Ireland, Belfast paid £11.9 million.
The local authority that spent the most on pension contributions per head of population was Falkirk at £341.24, said the TPA. The average number of councillors enrolled on the pension scheme was 11, with the highest figure in Highland Council with 57, followed by Leeds and Dorset with 56 each.
TPA director Matthew Sinclair said: "It's unacceptable that ordinary families and pensioners, who have seen council tax bills almost double in the last decade, have so much of their money spent on council pensions. These figures show the urgent need to reform the outdated Local Government Pension Scheme and to tackle the growing trend of councillors joining."
Local government minister Bob Neill said: "Hard-pressed taxpayers simply cannot afford to foot an ever-growing bill. This is why this Government is taking action to reduce the massive and unsustainable cost of state sector pensions."
But Sir Steve Bullock, chairman of the Local Government Association Workforce Board, said: "It is surprising that the TaxPayers' Alliance begrudges hard-working carers, dinner ladies and teaching assistants a more comfortable retirement. Far from being 'gold-plated', the average pension paid to LGPS retirees is £4,235 per annum, much of which is funded by employee contributions and returns from investments."
Meanwhile, Heather Wakefield, Unison's head of local government, said: "This simply isn't true. The local government pension scheme costs the taxpayer just 5p in every £1 paid in council tax. Councils get only 25% of their revenue from council tax, 75% comes from other sources, including business rates and local government grants."
