Council tax increase 'might pay for public pensions'

Date: 3rd August 2009

Britons could be facing an increase to their council tax burden, a pension executive has suggested.

Bob Holloway, head of the Local Government Pension Scheme (LGPS), has highlighted the possibility of extra revenues being raised from the property tax in order to fund shortfalls in the public sector scheme.

Currently, LGPS faces big liabilities due to the comparatively generous terms of its pension provision and the increasing longevity of members.

"Something has to happen - things may even happen before a general election," Mr Holloway was quoted by Public Servant magazine as saying.

"There will need to be something more major than a sticking plaster. Unfortunately, people are refusing to die."

Responding, a government spokesman downplayed the risk of council tax being raised for this purpose - but confirmed that changes might be made regarding LGPS to improve its financial position.

"There is an informal consultation going on with scheme administrators to gauge views ahead of the next year's routine three yearly valuation," he said.

"The government will continue to make sure the LGPS remains fair, solvent, protected against risk, and affordable to the taxpayer."

Alternative ways of boosting the scheme cited by Mr Holloway include raising retirement ages, increasing member contributions and cutting public spending.