13 March 2009
By Alex Klaushofer
Local government minister John Healey has leapt to the defence of council workers in the latest row about pay and benefits.
In an article written for this week’s Public Finance, the minister called for an end to ‘council catcalling’ and claims that local government employees are getting gold-plated pensions — unlike those working in the private sector.
‘I’m fed up with so-called pensions experts making baseless claims about local government pension schemes,’ he told PF in an interview. ‘I think that some of the poor publicity that councils have been receiving has been whipped up unfairly,’ he said.
He added: ‘I think that pensions are part of the reward for public service. I want to stand up and defend the principle of local government pensions because I think the attacks that are being made are unjustified.’
His comments follow media allegations that taxpayers could be forced to plug a black hole of up to £50bn to compensate for councils’ ‘reckless’ investments in pension schemes.
Healey said that claims about the shortfall were the result of an unwarranted comparison between private sector pension schemes and the Local Government Pension Scheme. ‘It’s comparing apples and pears,’ he said.
The long-term nature of the investment schemes favoured by local government meant that they were not vulnerable to short-term fluctuations in the market in the way most private sector schemes are, he added — a feature that allowed greater scope for remedial planning.
‘A judgement about the viability of the Local Government Pension Scheme can be taken in the long run,’ he said.
Asked about how pension liabilities might be affected by the recession, he said: ‘We’ll know that when we do the next valuation.’
Earlier this month Healey announced that the government would introduce legislation to force councils to publish details of senior executives’ pay as a way of keeping salaries down.
‘It is fair,’ he said. ‘At the same time I know that councils are big organisations and we need to get the best-calibre talent.’
PFmar2009
