News from Plymouth Labour

Plymouth Tories less than prudent with pensions

Plymouth’s Tories have rejected Labour calls to put aside part of the Citybus payment to cover the shortfall in CityBus pensions. This decision means the people of Plymouth will be contributing to the buying price of CityBus from the very outset.

Labour Councillor George Wheeler made a very simple yet sensible suggestion to set up a special account that would be ring-fenced to protect pension payments. Tory councillors, by a handful of votes, rejected this proposal. In doing so, they stand accused by Cllr Wheeler and his Labour colleagues of acting imprudently.

Cllr Wheeler said: “Part of the price being paid for the Citybus shares is specifically intended to cover the deficit and transfer costs of the pensions of some of the CityBus workers. This payment is estimated at around £5.6 million. My amendment called for this to be given a special, but not unusual, level of protection and security, so that it will be used to pay for the pension costs. If not, it will simply disappear into the abyss that Plymouth’s Tories allow to pass for good accountancy.

“Making up the deficit will require payments of £550,000 per annum for 10 years, though there will also be transfer costs and extra payments to cover re-valuation. If the Council retained the Company, these costs would continue to be met by the Company, as they have been since 1986. With the sale of the company, the price that Go-Ahead are paying to the Council includes £5.6million to cover these costs. We are saying that this money should be set aside for the specific purpose of meeting these costs in future years.

“There are different ways of making up pension deficits and the way the Tories seem to want to treat this is to wait until the next revaluation of the whole Council’s fund and then merge the Citybus pension costs into this. This will result in an extra payment of £225,000 each year – for ever! They will spend the whole of the payment for Citybus on their favourite projects now, including this £5.6 million pension payment, and leave future Councils to find the annual extra payments, either through increasing the council tax or reducing services.

“This is just another example of the Tories’ financial incompetence and irresponsibility.”

Other news from Plymouth Labour

• Activists restart Plymstock Party as Labour targets local elections - 12 December 2011
• Plymouth politicians launch petition to keep adventure activities safety law - 6 December 2011
• "Keep Moor View in Plymouth" boundary campaign launched - 7 November 2011