By Richard Johnstone | 29 June 2011
The government is likely to reject the conclusions of a Public Accounts Committee report which said the costs of public sector pensions have been stabilised, Public Finance has been told.
The PAC concluded in a May report that reforms introduced by the Labour government in 2007/08 had been enough to stabilise pension costs at around 2% of public spending. Some unions have seized on this finding to make the case that further pension reform is unnecessary.
But Cabinet Office minister Francis Maude told PF he did not accept this conclusion, saying the majority of public sector pension schemes remained unsustainable.
He said: ‘We’ll be responding to the PAC report in the next month or so, but it’s important to make the point that there were no changes introduced. New [pension] schemes were created for new entrants, which would definitely save money over the old scheme for new entrants.’
But he said this made no difference to people in the existing schemes, whose pensions were unaffected but which carried ‘an unsustainable burden’.
Maude said he was hopeful but not confident that a broad agreement on the changes could be reached in talks with the Trades Union Congress. A further meeting is planned this month.
The National Union of Teachers, which in June voted to strike over the proposed pension reforms, has said the PAC’s findings ‘shattered the government’s case for further cuts in public sector pensions’.
The government is likely to reject the conclusions of a Public Accounts Committee report which said the costs of public sector pensions have been stabilised, Public Finance has been told.
The PAC concluded in a May report that reforms introduced by the Labour government in 2007/08 had been enough to stabilise pension costs at around 2% of public spending. Some unions have seized on this finding to make the case that further pension reform is unnecessary.
But Cabinet Office minister Francis Maude told PF he did not accept this conclusion, saying the majority of public sector pension schemes remained unsustainable.
He said: ‘We’ll be responding to the PAC report in the next month or so, but it’s important to make the point that there were no changes introduced. New [pension] schemes were created for new entrants, which would definitely save money over the old scheme for new entrants.’
But he said this made no difference to people in the existing schemes, whose pensions were unaffected but which carried ‘an unsustainable burden’.
Maude said he was hopeful but not confident that a broad agreement on the changes could be reached in talks with the Trades Union Congress. A further meeting is planned this month.
The National Union of Teachers, which in June voted to strike over the proposed pension reforms, has said the PAC’s findings ‘shattered the government’s case for further cuts in public sector pensions’.
