Claims by Steve Webb, Liberal Democrat Shadow Work and Pensions Secretary, that the deficit of local Government pension schemes (LGPS) will surpass £60bn next year have been rubbished by public service union Unison.

Findings unveiled by Webb, following research by the Liberal Democrats using Freedom of Information requests, show that 83 out of 87 district and borough councils in England and Wales were in deficit at their last official valuation in 2007. Since this date, ten per cent of funds have conducted their own valuations, and deficits were found to be up by more than 280 per cent on average.

If this trend continues across all local government schemes, next year's official valuation could reveal deficits of more than £60bn, the Liberal Democrats said.

This could, the party said, lead to a combination of service cuts and council tax hikes as councils are forced under current rules to plug the gap of any increase in the deficit.

The Liberal Democrats said the Government has 'quietly' launched an informal consultation into removing this obligation for funds to be 100 per cent funded as a response, although this would only defer the cost and mean future generations will pick up the bill.

Unison, however, has slammed the claims, labelling them as "an attempt to scaremonger".

"It is wrong to say that all councils have mismanaged their pension funds," said Dave Prentis, general secretary at the union. "Only a few years ago, the local government pension scheme was reviewed and Unison and the local government employers agreed a scheme that is fair, and sustainable.

Prentis said that local government pensions were not only affordable, but necessary: "Local government workers pay more than six per cent of their wages into their scheme, to save for their retirement. The majority of scheme members are low paid women workers, and the average pension for them is under £40 a week - hardly a gold-plated pension.

"If these workers didn't save for their pensions, they'd be forced on to means tested state benefits.

He then turned his fire on the private sector.

"The real pensions scandal in this country is that the boardroom fat cats vote each other ludicrously generous retirement packages, while plotting to cut the pensions of their workforce," claimed Prentis.

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