New Research: £1 in every £5 of Council Tax goes on council pensions
Jan 2012 25

New Research: £1 in every £5 of Council Tax goes on council pensions8

The TaxPayers’ Alliance (TPA) reveals that the equivalent of £1 in every £5 of Council Tax raised in the UK is spent on council pensions.

A new TPA report also details the explosion in the number of councillors claiming council pensions.  Despite supposedly being volunteers, there are now 4,548 councillors on the Local Government Pension Scheme (LGPS), up by over 1,000 since 2007-08.

Click here to read the full report including a full breakdown by council

Click here for the complete press release

The key findings of this research are:

  • Total employer (taxpayer) contributions amounted to £5.063 billion in 2010-11. That is equivalent to £1 in every £5 of Council Tax. In 2009-10 the figure was £5.079 billion
  • In 2010-11 4,548 councillors were enrolled on the LGPS, an increase of 252 from the previous year’s 4,296. This has increased significantly from 3,527 in 2007-08
  • Birmingham spent the most on employer pension contributions in 2010-11 with a total of over £112 million, up from £110.3 million in 2009-10. The local authority that spends the most on pension contributions per head of their population is Falkirk council in Scotland at £341.24 per head.
  • The Scottish council with the highest employer pension contributions in 2010-11 is Fife at £56 million, an increase of £12.3 million from 2009-10
  • The Welsh council with the highest employer pension contributions in 2010-11 is Cardiff with £32.9 million
  • The Northern Irish council with the highest employer pension contributions in 2010-11 is Belfast with £11.9 million
  • The local authority that spends the most on pension contributions per head of their population in England is Dorset at £179.11 per head. In Wales it is Blaenau Gwent Council with £215.10; and in Northern Ireland it is Belfast City Council with £44.64 per head
  • The median average number of councillors on the LGPS is 4 and the mean is 11
  • The greatest increase in the number of councillors on the LGPS was at Fermanagh District Council where 19 councillors joined in 2010-11. In 2009-10 councillors were not able to join the scheme. This was the highest number in Northern Ireland
  • 35 councils reduced the number of councillors on the LGPS in 2010-11 from the previous year
  • Highland Council had the highest number of councillors on the LGPS with 57
  • The English councils with the highest number of councillors enrolled in the LGPS are Leeds City Council and Dorset County Council with 56 each in 2010-11
  • The Welsh Council with the highest number of councillors on the scheme in 2010-11 is Powys County Council with 51
  • Across London there are 589 councillors on the LGPS – the highest across all English regions

Click here to read the full report including a full breakdown by council

Click here for the complete press release

Matthew Sinclair, Director of the TaxPayers’ Alliance, 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 gold-plated retirement deals have all but disappeared in the private sector and it simply isn’t sustainable to keep the system as it is. These figures show the urgent need to reform the outdated Local Government Pension Scheme and to tackle the growing trend of councillors joining.”

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  • Blarg1987

    If we look at this objectively 20% of tax revenue raised via council tax goes into pensions.
    Council tax makes up 20 – 25% of council tax revenue the rest is made up from local goverment etc.

    Therefore that works out at overall 7% of council tax revenue goes onto public sector pensions. If we look at companies like BT etc where there are final salary schemes and pensions holidays they are paying in excess of 10% of their overall profits back into their pension schemes.

    Now overall this is a small drop in the ocean if compared to other companies with simular packages so would be silly to say they are unaffordable.

  • Tom

    more typical innacurate reporting from the “Taxpayers’ Alliance” – but wait, aren’t your bosses the super-rich Tories who bank offshore to avoid paying tax…??

    • MooG

      What exactly in the report is inaccurate, Tom? Please, enlighten us.

      It’s all very good and well playing the Tory shill card, but when people have seen their council tax double in the last decade, can’t you see why they might be upset at the amount spent to maintain these very generous pension schemes?

      And the number of councillors using the scheme is a disgrace, irrespective of your political bent.

      • Blarg1987

        I think it depends how you judge it, if it is a case of the overall % has increased on public sector pensions, then that is fair enough, if however the % has remained the same i.e. about 7% of overall council budgets then no people should not get upset.

        Alot of revenue in the last decade has been invested in services such as road maintenance, police, fire, NHS etc as these services needed massive amounts of reinvestment but also to a degree more bodies to provide a level service.

        I accept their has been some wastage but half the current goverment is still not reducing the paperwork front line staff have to do and the liability culture that has grown up around what theser services do.

        I do agree with your last point about councillers using the pension scheme for the own ends is wrong.

  • Peter Ruck

    It’s taken the TPA a very long time to wake-up to this. There are a whole lot of people out in the sticks who could have told them his years ago.

  • Ruck

    It’s taken the TPA a very long time to wake-up to this. There are a whole lot of people out in the sticks who could have told them his years ago.

  • http://upvcfasciasandsoffits.com/ Fascias and Soffits

    In my opinion most local councils need to sort out their inefficiencies now and get in line with the private sector.

  • http://upvcfasciasandsoffits.com/ Fascias and Soffits

    In my opinion most local councils need to sort out their inefficiencies now and get in line with the private sector.