Angela Rayner will allow councils to rise tax by 10% (Image: PA)
Council tax is going up across the UK by as much as 10% as deputy allows some town halls to double the usual annual increase without holding a referendum.
Yet almost a quarter of taxpayers’ money is being used to finance generous public sector pensions. That’s an average of £230 paid by hard-pressed families towards gold-plated pensions most of those in the private sector can only dream of.
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The public sector is a leviathan, to pay for comfortable retirements that most of us could not afford. It was a total of £7billion in 2024 – with some councils re-routing as much as half of taxpayers’ money to their pension pots.
One of the worst offenders is Birmingham City Council, paying in some £141.7million to pension schemes, while at the same time teetering on the edge of bankruptcy. Countrywide, more money goes to pensions than the £2billion spent on emergency council housing or the £1billion spent on local libraries and culture. Many of these are overly generous final or career-average salary pensions that are no longer offered in the private sector because of their unsustainable costs.
You can take a from the age of 55 and it rises annually with the rate of inflation. Some eye-wateringly high pension pots have been amassed with 7,607 former council workers receiving more than £50,000 a year and 203 top executives enjoying retirement on more than £100,000 a year – courtesy of your council tax payments.
Decades of generous public sector pensions have built up a debt of £5 trillion. Reform party leader has rightly described it a “ticking time bomb” for our nation’s finances.
Unfairly, new inheritance tax rules are targeting private sector pension pots from April 2027 and largely leaving public pensions untouched, further widening the gulf.
Overall, 1.16 million people are currently employed directly in local government while 6.8 million retired workers are members of the Local Government Pension Scheme (LGPS). To be honest, how many of these town hall staff would we miss if they weren’t there or permanently on strike? The new industry of Diversity, Equity and Inclusion, or DEI, has found a fertile home in local government amid a rising tide of wokeness.
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A recent government report concluded that 6,000 public authorities were employing 10,000 public DEI officers, at a cost of £557million a year to the UK taxpayer.
Last year, Birmingham City Council alone employed 11 staff in these Woke roles and could have saved £450,364 by axing them.
That this tier of fashionable bureaucracy is really something we could do without has found a warm welcome in President Trump’s America with his (DOGE) putting all DEI staff on paid leave until they are permanently dropped from the workforce. Entire swathes of the US government are now being analysed for their usefulness. , heading this DOGE task force, has pledged to reduce the US Federal deficit by half to $1trillion, by removing unnecessary bureaucracy.
A recent government report concluded that 6,000 public authorities were employing 10,000 public DEI officers, at a cost of £557million a year to the UK taxpayer.
Such a dramatic reduction of government costs in the UK would give more headroom for the necessary tax cuts to get our economy growing again. But as the party of the public sector, Labour would rather give them more of our money than less. They hope they’ll remain loyal voters, knowing which side their bread is buttered on.
But how long can Britain support this patent gerrymandering? How long can taxpayers be expected to support the privileged lifestyles of the public sector?
It is patently unsustainable and if Trump’s prosperity drive pulls ahead of the UK, cutting waste and stimulating growth, there must be a demand among voters for a similar approach here.
The one piece of good news is that the LGPS is currently running a surplus of £85billion and the plan is to use this to reduce employer contributions which are as high as 27% in some councils. No doubt you won’t see this in a reduction of your council tax but at least less of your hard-earned money will be going to support council workers living in the lap of luxury.