Harringay, Haringey - So Good they Spelt it Twice!
Big savings needed in Haringey. Where should the savings come from?
Now the party's truly over. I've been talking for a while now about the need for local authorities to save something like 20-25% from their budgets. This evening Panorama took up the theme. It's now out there. For Haringey that'll mean savings of something like £80-100m in savings. That's huge! We're facing the biggest cuts since the 1970s. Handled badly, it will be an emergency.
So what do we think? What would we choose? We can sit back and let the Council take decisions or we can share the responsibility and contribute our views. Probably about as exciting as doing your expenses, but something we should probably be doing.
Here's how Haringey's spending is split right now:
So discuss. For more details on Haringey's finances, see this area on their website.
Some rules. Only constructive discussion allowed. If you want to party-politic or bash the Council, please go to another discussion. I'm opening this discussion for constructive discussion only. Break those rules and ya get nuked!
So what do we think? What would we choose? We can sit back and let the Council take decisions or we can share the responsibility and contribute our views. Probably about as exciting as doing your expenses, but something we should probably be doing.
Here's how Haringey's spending is split right now:
So discuss. For more details on Haringey's finances, see this area on their website.
Some rules. Only constructive discussion allowed. If you want to party-politic or bash the Council, please go to another discussion. I'm opening this discussion for constructive discussion only. Break those rules and ya get nuked!
Tags for Forum Posts: cuts, public spending cuts
Replies to This Discussion
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Permalink Reply by Paul Harvey on
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Sadly these discussions often descend into name-calling and petty point-scoring. Stick to your guns Will, you're perfectly entitled to your opinion - most of us have the decency to respect that, whatever our background or political leaning.
As John D suggests, you're best off ignoring the taunts of the petty-minded and often aggressively argumentative that jump down your throat as soon as you dare offer up an opinion.
Luckily most on this site are pretty welcoming and respectful.
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Permalink Reply by Clive Carter on
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Paul: agree. While mentioning political parties in this context is disallowed and what is judged to be "bashing" the council is verboten, ad hominen stuff seems to be tolerated. Do you need to be one of the In crowd?!
Disclaimer: I believe there's waste in the council ... and in the private sector. I abhor waste and inefficiency wherever it appears. The topic is about savings needed in the council.
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Permalink Reply by JeremyS on
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That's really unfair Clive. Liz and Hugh do a really good balanced job of trying to keep things on track. Let's remember they're doing this on a voluntary basis and they'e not at their screens constantly I imagine.
As for allowing latitude to the in crowd, do you have any incidents to refer to? I take it that the latitude you were allowed on this piece of council bashing a little while back in this discussion means that you count yourself as one of the in crowd too?
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Permalink Reply by DavidJ on
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Will- the public sector pensions I am aware of do not offer anything like 3/4 salary. Something like 1/80 per year is typical (NHS and teaching). If you spent years in training/education or had a career break, started late you will be very lucky to reach about 1/3.
They are a very good deal - but they are not quite the access to instant wealth as some of the exaggerated claims made out.
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I just can't help feeling a flutter of suspicion about the degree of propaganda being aimed at these pension schemes. I don’t claim to know the ins and outs of the economics of the various schemes – but I do repeatedly see some very exaggerated claims being made. And then you have to ask who benefits and who suffers when these schemes are cut?
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Permalink Reply by HoL Site Admin on
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Comment deleted due to contravention of site terms - party politicking
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Permalink Reply by Alan Stanton on
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"Exaggerated" facts . . I thought was fairly common knowledge that public sector chaps and chapesses on final salary pension schemes got 3/4 salary plus a lump sum on retirement. Plus keep many of their benefits ie. in case of TfL free travel etc.
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To the best of my knowledge this is the legal and factual position about the Local Government Pension Scheme (LGPS). For HoL members interested to read a bit more here's a short article from Pensions Week.
1. This thread is about local councils' pension schemes. Generalisations about a range of public service pensions are unhelpful because they differ considerably. I have no idea about TfL, NHS, Teachers Pensions etc. (If people want to know about the latter, which I know is run differently, Julie is an NUT Executive member and may be able to advise.)
2. To the best of my knowledge, it is inaccurate to claim that all local authority staff get "3/4 salary plus a lump sum on retirement". Even if it is "fairly common knowledge".
3. Local authority pensions are calculated by a formula and depend on factors such as: how long someone has been employed and in the scheme; whether they were full or part-time. Plainly this will have a differential impact on groups of staff - e.g. low paid and part-time staff, especially women.
4. Let's take the very best case example i.e. someone who joined a local council at 16, who retires at 65 after working their entire career in local government; and who always worked full time and paid into the Local Government Pension Scheme. My understanding is that they would have a pension of 49/60 X Final Pay with no automatic lump sum. But before someone repeats the word "goldplated", I believe the average salary in the LGPS is around £22,000 p.a.
5. Bear in mind that councils' pensions are funded by contributions. Staff pay into the scheme fom their salaries. It is, in effect "a deferred salary".
6. Like other local councils, Haringey's pensions are governed by Statutory Regulations. It is not open to any local authority to make arbitrary or unilateral changes to the whole scheme.
7. Nor is it open to a local authority to 'dip into' its pension funds in order to make up shortfalls in its revenue budget.
8. I am unaware of any free benefits received by retired Haringey staff.
(Tottenham Hale ward councillor)
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Will is right to identify pensions as an area that needs looking at in terms of savings. I'm not sure how much can be achieved in the short term, but the generous pensions paid in the public sector have been storing up trouble for years. Final Salary schemes – rapidly disappearing in the private sector – have carried on in the public sector as though the rest of the world is unchanged.
For example, a family member worked in the State sector for 40 years then retired on what was a generous government pension. It was an inflation-adjusted final salary-number. That former bureaucrat has now been retired for about 35 years and I hope they have many more years left. The numbers do not stack up and the costs are simply unaffordable. People are living longer than was envisaged when these schemes were designed.
Local government is probably the worst offender, because they compare themselves with either central government or the private sector, depending on whichever makes them look the harder done by. There's little in-built incentive for prudence or responsibility, because the 'employers' themselves are highly paid and are themselves looking forward to a platinum-plated pension.
The private sector are shedding Final Salary schemes (except for the bosses!) because, attractive as they are to employees, they are not sustainable.
It's quite simple really: either the retirement age must increase or pensions must reduce (or both). It is inevitable, but I'm sure there'll be a lot of strife before it happens.
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Permalink Reply by Michael Anderson on
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I work in local government and must admit to feeling a bit fed up hearing that my pension is going to bring about the downfall this this country's economy.
I pay 6.5% of my salary toward my pension and my employer pays 13.6%. Similar private sector employers pay an average of 15.6%.
The scheme is far from platimun plated. The average pension for local government workers is £4,000 a year and for women in local government (who make up the majority of the workforce) the average is £2,600.
The cash flow into the local government pension scheme exceeds the cash going out by £5-6 billion.
The local government pension fund is the largest in the country (in terms of assets) and the fourth largest in the world. It invests hugely in the UK economy and currently has investments in Barclays, HBOS, HSBC and RBS of over £4.7 billion.
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Michael, its not your pension as such that's the problem. It's the aggregate effect and the level that's the problem. The effect on the country's economy is not a "downfall" overnight but a drag that's been building up over many years and set to become ever worse.
It's not entirely your fault: the whole population is living much longer than was anticipated (all these points apply to State pensions as well). People were not expected to live much longer after they retired. The mismatch between what's being paid in and what will have to be paid out in future is one important aspect. The other aspect is that, whichever way you cut it, every last penny comes out of taxation.
The absolute size of an individual's pension is less relevant than the number of pensioners claiming it and for how many years (or decades) they will be claiming it.
The holdings in the banks you mention were probably acquired pre-financial crisis, so the original investment may have been much more than £4.7b. The funds may be sitting on a loss at present (which may reverse) but it's not relevant anyway. The direction of cash flow during any one period is not relevant: its the long term effects that are important.
When you refer to the current size of the pension fund, you are refering to the scale of the problem. The bigger the public sector pension fund, relative to the rest of the economy, the more unsustainable it threatens to come, because the bigger will be the future obligations.
There's a third alternative (apart from slashing pensions or increasing retirement age) which is equally unpalatable: increasing contributions and/or taxes. -
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Permalink Reply by Julie on
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I'd love to chip in and explain about teachers' pensions, Alan, in fact I tried this morning. I posted something about calculation of the lump sum and accrual rates (which are 1/80 for the pension and 3/80 for the lump sum.) I also posted something about teachers who had opted out of the scheme in the Thatcherite eighties, when private pensions were sold as superior to public sector ones.
Unfortunately, I was deleted immediately with a snippy note that what I had put was against the rules of the site and 'party politicking.' It would have been nice to have an explanation.
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Julie, you know the rules. No party politicking. I'm afraid since our time is limited, once a member has been told a number of times about a rule, we assume they are aware of it and don't write to them. I'm sure you'll understand.
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