08 August 2003
The harsh realities of the local authority pensions 'black hole' hit home this week, when pension fund losses at Scottish councils were estimated at more than £2bn.
A survey by the Scotsman newspaper claimed that councils north of the border lost £1.5bn in value over the past 12 months, leaving authority schemes with an overall £2.4bn deficit.
That figure is far higher than the £900m estimated in March. If the figures are accurate, it could lead to big council tax rises – or even service cuts – next year as authorities struggle to shore up their schemes.
But a spokesman for the Scottish Executive told Public Finance the £2.4bn figure was 'debatable' and, at worst, reflected a mere 'snapshot' of fund valuations following a period of 'excessive' stock market uncertainty.
The Executive warned, however, that no extra cash would be made available for Scottish authorities.
PFaug2003