Magazine article Public Finance


Magazine article Public Finance


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Pressure on pensions

* The wise words from Roger Buttery (Feedback, May) should be heeded by everyone responsible for council pensions.

Nearly 30 years ago, the government put pressure on the largest pension schemes to invest in the Channel Tunnel. Anyone still holding Eurotunnel shares can attest to the wisdom of the trustees who resisted. Around the same time, the government reduced the solvency level of the LCPS to coerce councils into financing a small cut in the poll tax. Ten years later, the Maxwell pension schemes suffered catastrophically from robbing Peter to pay Paul. The poll tax fallout may be affecting LCPS solvency today.

Anything that erodes trustee independence is a risk to LCPS solvency that, as well as potentially involving a breach of trust, is likely to bear most heavily on members. Pooling must be bottom up, not top down.

As Roger said, the rate of return on any investment in infrastructure should, as a minimum, be able to finance future pensions, and be underpinned by an irrevocable, enforceable government guarantee.

David Adams

Unhealthy cuts

* I have just had to close the doors on a service in Aberdeen due to funding being withdrawn (Public health grants to be cut by 2i6om, bit. …

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