Reform to end gold-plated pensions for council workers

Telegraph

2 days ago

Reform UK has unveiled plans to reduce gold-plated staff pensions at the councils it won from Labour and the Tories at the local elections.
Richard Tice, the party's deputy leader, said it would take an axe to final salary schemes, describing them as unaffordable and an 'outrage'.
Speaking to The Telegraph, he said Reform-controlled authorities would stop offering such generous terms to new recruits. He added that staff on existing contracts would have to accept lower annual pay rises to balance out the huge cost of funding their retirement.
Nigel Farage's party won control of 10 councils across England last month, marking its major electoral breakthrough. It did so on a pledge to find huge savings, promising to end local authority focus on diversity and inclusion schemes and hitting net zero targets.
'Country is going bust'
Mr Tice is fronting efforts to free up money that could be reinvested in improving services like bin collections or used to freeze council tax. He has identified wasteful and underperforming pension schemes as an area where Reform councils can save hundreds of millions of pounds.
'Whether people like it or not we should not be employing people on defined benefit contribution schemes,' he told The Telegraph.
'It's an outrage – the public can't afford it. It's absolutely ludicrous, and this is why the country is going bust and it's all got to stop.
'We're going to have to go to war with these people. Our job is to wake people up as to where their money is going and why we're all being ripped off.'
Mr Tice said under many gold-plated pension schemes councils were having to contribute up to 30 per cent of their officials' salaries. Such final salary schemes are substantially more generous than those in the private sector.
He said that if staff are on such terms 'then candidly that has to be taken into account when you look at people's annual pay rises'.
'You look at the overall cost of employment and if they're not prepared to then a whole load of people are going to have to be made redundant,' he warned.
'Councils are going bust all over the country – the country's going bust, and until we've come along no one dared admit it.'
Last year it emerged that a quarter of council tax revenue was now being spent on pension schemes that are 'unjustifiably generous'.
It means the average household is now contributing £230 a year to the retirement plans of officials who, on average, earn nearly £40,000 a year.
Last year local authorities contributed almost £7 billion to staff pension pots, The Times revealed, making them one of their highest costs.
Mr Tice said that, as well as the generous contributions, many councils were also investing in 'woke' pension funds that were underperforming.
He said Reform would be examining how much money was being put into net zero funds and whether they were making below average returns. The councils controlled by the party could also save upwards of £200 million a year just by renegotiating the investment fees they are charged, he added.
'I can smell the taxpayer being ripped off,' he said. 'Their council tax is being gobbled up by pension fund contributions because they're overgenerous and they've been badly managed for decades.'