Two council unions renew backing for pensions reform deal

By Richard Johnstone | 21 December 2011

Two of the trade unions that suspended the agreement with government over changes to the local government pension scheme have announced that the reform deal is back on.

The deal on the main points of reform was put in doubt yesterday after Communities Secretary Eric Pickles put a new 10.9% limit on employer contributions to the Local Government Pension Scheme. This is lower than many currently pay.

Following discussions with Pickles, Chief Secretary to the Treasury Danny Alexander, the Local Government Association and the Trades Unions Congress, a way forward has now been confirmed by the two unions.

However, the Unite union, which also called off the deal, said it was still suspended. A spokesman said it will now go before that union's national local authority committee on January 9 to be discussed.

The agreement formed part an announcement by Alexander yesterday of the principles for reform across the four main public sector schemes.

The changes will increase the retirement age for public sector pensions, and move to a career average defined benefit, in new pension schemes. Detailed discussions on these will take place in the new year.

Unison, the largest local government union, said that the letter from Pickles that mentioned the cap had been withdrawn.

The union’s head of local government Heather Wakefield said she was pleased that the framework agreement was ‘back on track’.

‘We have always argued that as the local government scheme has funds worth more than £140bn, it should be dealt with in a different way to the other Treasury-backed schemes. 

‘Following discussions with senior members in local government we hope to move towards detailed negotiations in 2012, where we can work out the very complex details of the new pension scheme.’

The LGA, which represents local government employers, said it welcomed the ‘speedy clarification’.

Chair Sir Merrick Cockell said: ‘The proposals and timescale set out are a sensible and reasonable way of achieving both the short-term financial targets and the long-term reforms set out in Lord Hutton’s report on public sector pension schemes.

‘We are committed to the successful conclusion of this process to ensure the pension scheme is reformed in a way that is affordable for the taxpayer and fair to our staff.’