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Tuesday, October 20, 2009

What is the message?

The Welsh Conservatives are in the Western Mail this morning with the startling news that more than a quarter of the average council tax bill goes on paying council workers’ pensions. They say that the cost of these pensions in Wales was £354.8m in 2007-8 and that this accounts for around £272 for every household in Wales – some 27% of the average band D council tax bill.

Now the first thing to note is that the revenue from Council Tax actually amounts to a small part of the total income of a local authority. So although £354.8m is a lot of money it is actually about 5% or less of the total amount of money spent by Welsh councils.

Secondly, I am not clear what point the Tories are making. Do they want to cut the pension entitlement of this group of workers, most of whom are paid below average wages? I think we should be told.
Sounds to me like a half thought through idea. Unlike fire service and police, councils do not pay pensions from revenue - so the direction of fire on this one is more than a little displaced. It would be interesting to see how much the council employess, themselves, actually contribute to their pensions - alongside this figure.
I doubt many council workers pay much into the pension pot, if your paid £5.73 which means your take home pay is about £185 a week does not give you hell of a lot to save does it.
The point must be that public sector pensions in their current form are unsustainable. This is now recognised by all the main poitical parties.
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