Epsom Council's pension black hole

The TaxPayer’s Alliance publish their latest research on local Council pensions today, and it makes for interesting reading, particularly in light of recently announced cuts in Epsom and Ewell.

There has been uproar here recently due to our Borough Council voting to scrap free parking for Blue Badge holders in the town’s car parks. Groups of residents and political parties alike have put together petitions to get this decision overturned, stating everything from the necessity to look after disadvantaged members of our society to the sheer impracticality of disabled drivers reaching the ticket machines. The Council has hit back, pointing to the difficulties of balancing the books, and the other difficult decisions that have been made to cut costs including all Council staff taking a pay freeze in 2010.

A quick look at the accounts, however, seems to belie the Council’s talk of doom and gloom. Yes, reserves are down - £7.3m in March 09 vs. £8.6m in March 08 – but at least there still are reserves. What, then, has the Council so worried? Could it be their huge black hole of a pension pot?

According to their accounts, Council pensions in Epsom and Ewell showed an £8.8m defecit increase between 07/08 and 08/09 making the current pension liability for our Council £17.8m, or just over 20% of its entire net worth. This, along with a reduction in investment income, would appear to be the major worry for the Council and therefore the main reason to cut services elsewhere. It seems in Epsom, the Council really is expecting pensioners to pay for its pensions.

And what pensions they are! A 15.5% pension contribution from the Council for every employee…every year! Compared with an average of a mere 6.5% employer contribution in the private sector. One year tax freeze or not, our public servants in Epsom have never had it better. Perhaps the Council officials would do well to read the TPA report, and act on some of their suggestions so that rather than having to cut services for the most at-risk members of our society, they can do some belt-tightening elsewhere…

+++UPDATE+++

Well well well! An interesting little nugget of information has just dropped into the DadForChange inbox. It seems that it's not only Council employees getting a great deal on their pension, but there is also at least one Councillor who is signed up to the scheme. I really hope that they declared an interest and did not vote on the budget. The idea that one of our elected representatives voted in measures to cut local services to pay for their own pension really is beyond a joke.

+++UPDATE+++

And another! DadForChange's Town Hall source has estimated that the blue badge payment proposal is only expected to bring in £60,000 revenue to the Council. This figure doesn't even include the cost of adapting all the town's ticket machines for disabled use. Perhaps someone could enlighten me as to the point?