Half of Dundee council tax goes on staff pensions
Half of the council tax collected in Dundee goes to pay the pensions of retired council staff.
- By Brian Allison, local government reporter
- Published in the Courier : 24.05.10
- Published online : 24.05.10 @ 05.39pm
As the amount collected in council tax is around £46 million a year, that means about £23 million is going to pay pensions.
However Councillor Willie Sawers, the SNP administration's finance spokesman, said the figure represented less than 6% of the council's total income — the vast majority of which does not come from the council tax.
Well over 80% of the council's income is provided by the Scottish Government, with council tax accounting for around 12%.
Mr Sawers said, "The pension contributions that Dundee City Council makes are about 5.7% of the council's total income.
"So it is perhaps misleading to portray that as a high proportion of council expenditure as it is a little over one twentieth of the council's income."
Mr Sawers was responding to weekend reports that claimed around a third of the council tax collected across Scotland is used to pay staff pensions.
Dundee was said to have among the highest proportions (50%) of council tax going into pension funds — behind Orkney at 69%, the Western Isles at 68% and Shetland Islands at 65%.
National campaign group the TaxPayers' Alliance has said council pension schemes are unaffordable and called for them to be overhauled.
Mr Sawers insisted that the vast majority of retired local government employees received very modest pensions.
"In the debate surrounding local government pensions it is important to remember that the average pension is about £4000 or £5000 per annum and is related to the final salaries the people earned," he said.
Mr Sawers added that the amount the council contributes to the pension fund was not set in stone and, depending on how well the fund's investments performed, could reduce.
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