Cash-strapped Northamptonshire County Council is proposing to hold back £2m from its staff pension fund as part of plans to try to balance its books.
The measure is outlined in the next Tuesday’s cabinet papers with the county council saying that it is now predicting a £4.4m overspend this financial year on its £417m overall budget.
The £2m holdback in payment to the pension scheme will be part of a series of recovery plan measures to try to make the budget balance next April.
It will go before the pensions committee and comes after a similar proposal in April was defeated and saw long-standing chair of the pensions committee Cllr Graham Lawman removed from his post by leader Matt Golby for failing to vote for the move.
The cabinet paper says: “The Council’s Pension Fund actuary concluded that they would consider a £2m reduction in the annual deficit payment to be acceptable from the Pension Fund’s perspective. A report to this effect is due to go to the Pension Committee in October for consideration. If this transaction is approved, this will be a one-off reduction in the council’s 2019-20 deficit contribution.”
Labour councillor Anjona Roy, who is a member of the pension committee, said the “recovery plan” is indefensible.
She said: “It seems the only route the administration can think of to balance their books is to again cane the staff. They have already denied them a pay rise for years, now they want to remove agreed investment into their pensions.”
Fellow committee member Cllr Bob Scott, who is leader of the opposition on the council, also said he would not vote for such a move. He also thought a few other members of the committee – which includes university representatives – would not vote for the plan either.
The current £4.4m overspend is an improvement of £580,000 on the overspend figure reported to the previous cabinet meeting.
Much of the overspend is in children’s services, with senior officers originally planning to save £10m from the failing department this year.
However, many of these planned savings are very unlikely to be realised because of the high cost of agency staff and not being able to make hoped-for cost reductions in residential placements.