Taxpayers Attack Council `Gold-Plated` Pensions

Councils should spend less and reform their pensions to ease the burden on taxpayers, the group added.

Council leaders should be forced to cut "gold-plated" pensions for town hall staff because they will be unsustainable during a deepening recession, a pressure group said on Friday.

The Taxpayers' Alliance, which campaigns for lower taxes, said one pound in every five paid in council tax goes towards local authority pensions.

Council pensions, excluding those for firemen and teachers, cost 4.5 billion pounds in 2007-08, a seven percent rise on the year before, according to the group's research.

"Gold-plated public sector pensions place a stranglehold on council budgets," said Maria Fort, an analyst at the Alliance. "They are unjust, unsustainable and unfair."

Councils should spend less and reform their pensions to ease the burden on taxpayers, the group added.

The Local Government Association, which represents 466 councils in England and Wales, said council pensions have recently been reformed and offer good value for money.

"Councils provide more than 800 different services for local residents and these cannot be delivered by robots or machines," said LGA Chief Executive John Ransford. "According to the Treasury, councils are the most efficient and effective part of the public sector."

However, the government looks set to target the highest-earning council leaders with new legislation, forcing councils to reveal what they pay senior staff.

"We have seen in some councils' salaries spiralling, we have seen some big pay-offs for failure, and that can't go on," Local Government minister John Healey told the BBC. "The public needs to know the full picture."

On Wednesday, the LGA said council tax bills will rise by three percent, the lowest rise in more than a decade. The average bill for 2009-10 will be 1,414 pounds.

The increase is at the same level as the CPI (Consumer Price Index) rate of inflation, but well above the Retail Price Index, on which most wage deals are based, which stands at 0.1 percent. The rises will vary widely across the country, according to research published on Friday by the Chartered Institute of Public Finance and Accountancy (CIPFA).

London will have the lowest increase in England of 1.2 percent, while the rises in the northeast and the southwest will be 2-1/2 times higher at 3.5 percent.