Baroness Altmann (Non-Afl)

My Lords, in speaking to my Amendment 20A, I shall also speak in support of Amendment 20, to which I have added my name. I thank the noble Baroness, Lady Stedman-Scott, for both her clear exposition and her support for my amendment. Amendment 20A seeks to benchmark the Local Government Pension Scheme’s employer contributions rather than just the liabilities. It asks the LGPS to “report publicly the employer contribution rates being paid by each scheme and establish a benchmark for employer contribution rates” as a proportion of, for example, salary. It also asks the LGPS to “collect and publish data from each local authority council employer in the scheme, to report the percentage of council tax receipts that are represented by employer pension contributions”. I have struggled long and hard to compile some information that would give us a picture, across local authorities, of what proportion of council tax receipts is spent on pension contributions in each area. I have to say that I ended up coming back to a national average, because that was the only figure that I could readily find. I thank Steve Simkins at Isio, who told me about a council where the actuarial valuation implied an employer contribution of zero but the council was asking for a 15% contribution anyway. Unless you have a benchmark for this kind of information, you would not know it. Before the noble Lord, Lord Davies, asks me about this, let me say that I will have to seek permission to let him know which council it is; if I am able to do so, I will, of course. The Minister and the noble Lord, Lord Davies, have suggested that those of us who are laying these amendments are somehow concerned about the surpluses. I do not believe that there is concern about the surpluses; the concern is around how the surpluses are dealt with. We have concerns that there have been significant overpayments, amid pressure on both local and national taxpayers, while urgent local and national expenditure has had to be either cut or not made, and while councils remain underfunded and government borrowing keeps rising. Those are the consequences of not allowing the surpluses to feed through to the expenditure on the employer contributions—and that, I think, is the concern that this suite of amendments is trying to address. When we are talking about these pension schemes, we are talking about a funding level that is an estimate. The assets make no allowance for future returns, for example, even though they are invested to earn future returns, as would be expected of any long-term investment. However, the liabilities fully build in assumptions— expectations—of what the future liabilities will be over the very long term. The money for the contributions is required now and has to be paid today, but a one-year or two-year cessation of extra contributions surely does not undermine a scheme that is already overfunded for the next 50 years, never mind the next two years. And of course it can improve local well-being. I hope that the Minister will consider accepting these amendments on the basis on which they are proposed, which is in seeking not to cause problems but to help both local and national funding. Yes, it is true that local authority employers pay varying percentages of salary into the different schemes, but it would help the public and councillors themselves to have some kind of comparison of the rates that they are paying and of the funding level of the scheme and the implications that that might have for future funding, rather than to continue with the current range. I am told that councils such as Avon pay rates of between 15% and 40%, depending on the employer, into a scheme that, based on all conventional funding measures, does not require that money at this time.