Rising cost of council pensions eating up local government budgets

May 27, 2011 5:25 PM

The Local Government Finance Statistics out today show the steady rise in the cost of employers' contributions to council pensions as a share of local government income.  Those pensions consumed over 22 per cent of income from council tax in 2009-10, which shows the extent to which savings in this area could mean lower bills for hard pressed taxpayers.  That is up from around 19 per cent in 2005-06, which is a significant rise in such a relatively short period of time.

In our last report on this issue - which found councils were facing a £53 billion pension deficit in 2008-09 -  we discussed some options for reform to cut costs.  If the Government wants to make it a bit easier for councils to balance the books then they should consider action in this area.

Here are the statistics on the rising cost of employer's contributions to local government pensions:



 The Local Government Finance Statistics out today show the steady rise in the cost of employers' contributions to council pensions as a share of local government income.  Those pensions consumed over 22 per cent of income from council tax in 2009-10, which shows the extent to which savings in this area could mean lower bills for hard pressed taxpayers.  That is up from around 19 per cent in 2005-06, which is a significant rise in such a relatively short period of time.

In our last report on this issue - which found councils were facing a £53 billion pension deficit in 2008-09 -  we discussed some options for reform to cut costs.  If the Government wants to make it a bit easier for councils to balance the books then they should consider action in this area.

Here are the statistics on the rising cost of employer's contributions to local government pensions:



 

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