More and more state spending is going towards paying the pensions of public sector workers.
This is from Patience Wheatcroft of the Times via the Civitas blog:
'In Greater Manchester, total pension payments for fire-fighters are put at £30.4 million in 2005-06, compared with salary costs of £74.9 million. This amounts to a doubling of pension payments in the past eight years... Council tax payers in the area have seen the amount that they pay for fire services rise by 68% over those eight years… [But] net of inflation and pensions, the Fire Authority’s budget has actually reduced by 7% over the period.’
There is nothing wrong, in principle, with money being spent on the pensions of public sector workers. The problem is with the practice. From the taxpayers' point of view, these pensions are unnecessarily and wastefully big, for two reasons:
First, they are unnecessarily generous to attract people to work in the public sector. Most people when they start on a career in their 20s, have little or no concept that public sector pensions are vastly higher - in relation to the salaries - than those provided by the private sector. So the employees could be hired to serve us at lower cost.
Second, these luxury pensions are then abused and effectively inflated still further. Police and firemen and other public servants take early retirement on excellent terms far more frequently than people in the private sector.
Why does this happen? It is a simple case of the 'producer interest' at work. Those who are in charge of such things are, at the same time, part of the workforce that benefits from 'generosity' (as some may call it) or 'selfish waste of taxpayers' money' (as it should more rigorously be viewed).
Posted by James Bartholomew • Indexed in Pensions • Waste in public services
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