Wednesday 11 February 2009

Boris slams public sector pensions

Mayor of London, Boris Johnson, writing in the Daily Telegraph has highlighted the resentment felt by taxpayers who have to pay the exorbitant salaries of public officials and their consequent gold plated pensions. BoJo wrote:

"As the recession deepens, so does the divide between those who are paid by private companies, and those who are paid by the state, and nowhere is the division starker than in the matter of pensions.

In local government…you can expect to be awarded one sixtieth of your final salary for every year of service. So if you are a chief executive or other senior official, on a salary of more than £200,000, and you have worked for 30 years – well, you do the maths.

It is a very generous deal, and speaking as a former MP and current Mayor, I hesitate to knock it, and I only do so because it is unsustainable. With firms now laying off staff in their thousands, with unemployment apparently set to hit three million for the first time since the 1980s, it is simply too much to expect council-tax payers to scrimp and save to pay for the pensions of local government's colossal clerisy, when those pensions are so much more comfortable than anything they could afford themselves.

And the…reason for believing the position to be unsustainable is that these public sector pensions are now, frankly, unaffordable."

I agree with Boris entirely. But whilst he can’t save the entire country, as Mayor of London he is in a position to deal with the gravy train of the GLA - which makes his decision to appoint Leo Boland as Chief Executive on a salary of £205,000 all the more surprising and, frankly, disappointing given Boland’s record during his time at Barnet.


Anonymous said...

You'd think Boris would know what the accrual rate is in his own pension scheme. The current local government pension scheme is 80ths not 60ths. Still a lot, unsustainable and frankly a kick in the balls to those in the private sector.

Don't Call Me Dave said...

Anon - it has been reported in many papers that 25% of our council tax is used to pay local government pensions. If that is correct, it is unsustainable if public services are to be maintained. I think it is time to sound the last bell for final salary schemes.

Anonymous said...

I think you are quite right, that 25% of all CT goes towards pensions, but that is the tip of the iceberg. If a comparison of public sector pension assets against liabilities was undertaken you'd find a huge black hole that eventually needs to be plugged pushing the figure even higher.

Final salary schemes never really stood a chance after the Maxwell scandal and Brown's tax raids.