View the article online at http://citywire.co.uk/money/article/a646747
Local councillors to lose gold-plated pensions
The government plans to rein in the generous pension scheme offered to councillors that costs taxpayers £7 million a year.
The government plans to scrap taxpayer-funded pensions for local government councillors in a bid to make sure every part of the public sector ‘does its bit’ in the bid to cut costs.
Eric Pickles, secretary of state for communities and local government, has announced the end to councillor’s gold-plated pensions ahead of this afternoon’s local government finance settlement, which determines how much councils will have to spend over the coming year.
A total of 4,548 councillors had signed up to the generous pension scheme by 2010/11, according to the Taxpayers’ Alliance. It is estimated that scrapping the pensions will save taxpayers’ £7 million a year.
The pensions offered to councillors are guaranteed and based on the allowances they are paid as councillors, not pensionable pay. The pensions come with life insurance for the councillor’s spouse or partner and the ability to take an ‘early retirement’ deal if they are voted out of office.
Access to the local government pension scheme will be reined in as the government seeks to make public sector savings in a bid to reduce the UK’s deficit.
Brandon Lewis, minister for local government, said: ‘Every bit of the public sector need to do its bit to help pay off the unsustainable deficit left by the Labour party. Conservatives believe that councillors are civic volunteers undertaking public service, they are not, and should not be, state employees of the council dependent on the municipal payroll.’
Grant Shapps, chairman of the Conservative party, said the reforms would ‘strengthen the integrity and independence of councillors, so that these local champions of the people are seen to stand up for the best interests of taxpayers, not the town hall state’.
News of the cuts to councillor pensions was welcomed by the Taxpayers' Alliance which said it would give the public confidence that 'councillors are there to represent the residents of a local ward rather than forge a career as a professional politician'.
Matthew Sinclair, chief executive of the Taxpayers' Alliance, said: 'Receiving allowances is not the same as pensionable pay, and the fact that many local authorities allow councillors to enrol on the scheme calls into question the voluntary nature of participating in local government.
'Instead of making local government just another job with pay, perks and a pension, councillors need to concentrate on representing the interests of their constituents by holding staff to account and encouraging them to deliver services at a better value.'
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