Council tax going on public service pensions

By Jennifer Hill

LONDON (Reuters) - A fifth of council tax receipts are spent on local government pensions, a new report shows.

The average council spent 10 million pounds on pension contributions in 2006/07, up 13 percent on the year, according to the Taxpayers' Alliance.

The total bill for local government pensions was 4.6 billion pounds, with one pound in every five of council tax going towards supporting civil servants' retirement.

"It's unacceptable that ordinary families and pensioners who struggle to pay inflated council tax bills see so much of their money spent on gold-plated council pensions that have all but disappeared in the wider economy," says chairman Andrew Allum.

The Taxpayers' Alliance called for urgent reform of the "outdated" local government pension scheme.

Specifically, it wants to see an end to councils paying added years benefits to staff who retire early and for councils to collectively campaign for national reform.

Despite council tax doubling in the last decade, many local authorities are raising council tax and cutting services, such as rubbish collection or care for the elderly, the pressure group says.

Ten years ago the average band D council tax bill in England was 646 pounds -- a figure that soared to 1,268 pounds last year.