Pensions Row and Striking Council Workers

I had a meeting yesterday morning at the Council. I was expecting to have to push past a hoard of striking Council workers (Southampton's share of the 1m or 400,000 - depending on who you believe - public sector workers who went on strike yesterday). In the end I encountered one pleasant lady who handed me a leaflet. I suppose it was quite early in the morning.

Council workers are protesting against planned changes to the Local Government Pension Scheme (LGPS). These include moving the retirement age to 65 in all cases and scrapping the 85 rule (a rule that allows some scheme members to retire on full pension benefits if their combined age and length of service in the scheme adds to 85).

The LGPS is a funded scheme which means that each Council pays in money every year to ensure that there is sufficient money to meet all the liabilities, current and future under the scheme. It is estimated that nationally the scheme faces at least a £30 billion shortfall, equivalent to a £1,392 bill for every household in England & Wales. The scheme’s cost to councils has soared from £1.5 billion in 1997 to £3.5 billion last year.

This is one of the main reasons why Council Tax bills soar every year.

The problem is one of central Government's making and not the fault of local Councils, although local taxpayers are made to suffer.

Given many private sector workers could face having to retire at 69, it is not sustainable to continue to allow town hall employees in good health to retire at 60 on a full pension. With an ageing population increasing the cost of the existing scheme, hard-working families and existing pensioners simply cannot afford to foot the growing bill through ever higher council taxes.

The cross-party Local Government Association has commented, ‘the employee staff contribution compared to the employer council tax contributions are currently not balanced and this must be addressed. The council taxpayer simply cannot pay more. The changes to local government staff pensions are both needed and necessary. Unless action is taken in the very near future, the cost to individual council tax payers and local government because people are living longer will continue to rise’.