Due to their failure to reform, the cost of town hall pensions nearly quadrupled under Labour. Town hall pensions cost taxpayers’ over £300 a year to every family and pensioner paying council tax, diverting funds from emptying bins, cleaning the streets and keeping council tax down. 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 – from asking well-paid staff to contribute more, to looking at the scope for administrative savings from more joint working and merging funds.
I have announced at a recent conference that we need to look at how we manage the 89 schemes across the country which are responsible for around £150 billion. At present, there are eighty-nine separate schemes, running with various levels of efficiency, across the country. Cumulatively, they pay out £8 billion at a yearly cost of £500 million in administration fees.
The Local Government Pension Scheme has served local authorities well over the years, but it is time to look at how to make the scheme more financially efficient for employers and taxpayers and to ensure it has long term stability and a chance to be part of infrastructure investment opportunities. Our scheme is worth more than Ontario Teachers, a much vaunted scheme that invests internationally, yet due to being so widely split across 89 schemes we simply do not take advantage of the buying power that £150 billion can give.