Copeland Council's £14m pensions black hole
Last updated at 11:27, Thursday, 12 December 2013
A PENSION fund deficit of up to £14 million could bankrupt Copeland Council, a senior councillor believes.
Copeland denies that it faces bankruptcy but cannot say how it will pay off the deficit in its pension scheme.
Coun Alistair Norwood, the shadow portfolio holder for finances, says the future of the council is in jeopardy as it has not been making enough contributions to its scheme.
A new report reveals that the council has been given three possible estimates – £10million, £14million or £17million – on how much it owes. The money needs to be paid back over the next 19 years.
The council says the report states the most realistic deficit amount is £10million and said it is looking at the best way to fund the deficit alongside the difficult choices it has to make on services. It says no definite plans have been put in place until it knows how much its budget will be next year.
Basing his figures on the £14million sum, Coun Norwood claims Copeland will have to fork out between £1.5million and £1.75million a year for the next 16 years to pay it off. But this will be difficult as the council’s budget has been slashed to between £9million and £10million.
He said: “I have no idea where they are going to get that £14million from and I cannot see how they are going to pay that money off. If grass cutting cannot be paid for, how is the money for the pensions scheme going to be found?
“We should have been paying this off years ago but they have just left it. The £14million needed will bankrupt Copeland, it’s enough to sink it. But we have no option but to pay it.”
He believes the deficit has risen from £10million five years ago to £14million now.
All council employees have an opportunity to join the Cumbria Local Government Pension Scheme, run through Cumbria County Council.
Coun Norwood said the deficit would increase even more as a result of job losses in the council. He blames other factors – including Gordon Brown taxing pension funds when he was Chancellor – for the high deficit and claims that some sister authorities have paid money for the pensions scheme up-front to reduce the deficit.
Coun Norwood and Coun Brian Dixon raised concerns at a full council meeting last week.
Coun Gillian Troughton, portfolio holder for finance and HR, told The Whitehaven News: “Although the pension deficit doesn’t make our task any easier, we are working with the scheme managers to invest early to ensure payments in future years, from the diminishing budget, are affordable. They don’t risk bankruptcy, as Coun Norwood sensationally suggests.
“While finances will be tight, this is just one of a series of pressures on our budget that must be met – over a number of years. Austerity and the budget cuts we have seen from the Conservative-led government are the biggest challenge to our budget.
“Coun Norwood might wish to put some of his comments to the government who are the ones who are decimating Copeland through these huge cuts.”
She says Coun Norwood was part of the Resource Planning Working Group which made the current investment plan and as she was elected in 2011, she has had no part to play in the development of this current plan.
First published at 10:57, Thursday, 12 December 2013
Published by http://www.whitehavennews.co.uk
Have your say
ALLERDALES black hole is bigger than Copland's their's is Â£30m Copelands Â£23m
It is disgraceful that CBC is in such an abysmal state. Why should allerdale's hard work and foresight be put at risk by merging with copeland because of the the total and utter mismanagement of copeland's budgets. As an Allerdale resident do I want to merge ...NO WAY!! How has this happened? After all they do have the cash cow of sellafield, image if the didn't! Perhaps copeland resident need to put in a vote of NO CONFIDENCE with the current administration? After all in the words of the song things can only get better!!
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