Fire chief's pension deal unlikely to benefit taxpayer

Tuesday 11 September 2012

A number of factors about the generous pension deal for the chief officer of Strathclyde Fire and Rescue Service should have prompted searching questions from members of the board.

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Brian Sweeney retired as firemaster five years early at the age of 50 and received a lump sum. A month later he was re-appointed on a three-month contract to the post he had just left.

Under tax rules the early payment of the pension pot made him liable for unauthorised payment charges of £206,000. However, the board agreed to pay the charge for him as part of the deal. This would have been an extraordinarily generous payment to one member of staff at any time. When all public services are required to make savings and jobs are being cut, such a large sum can only be justified if it produces public benefit, such as longer-term savings. The members of Strathclyde Fire Board, however, decided to meet the £206,000 without a report into the business and financial case. Rightly, this has now been investigated by Audit Scotland. The judicious conclusion of Fraser McKinlay, the Controller of Audit, that the deal "would not meet the public's expectations of what is an acceptable use of public funds" is a considerable understatement. The public's expectation is that when budgets are being squeezed, well-paid public employees should recognise they have no right to taxpayer-funded perks.Well-funded civil service and local authority pensions were designed to compensate public servants for lower salaries than they could expect in the private sector. In many cases, however, the gap between the two has closed, with average pay now higher in the public sector. More than 10 million privately employed workers contribute to public sector pensions via taxation but have no occupational pension of their own. Many others in the private sector have seen their final salary pensions replaced by money purchase schemes whose value depends on the vagaries of the stock market.A general public that has seen its own pensions shrivel and local authority services reduced to cut costs is highly sensitive to excessive pension payments for officials on high salaries. That does not mean that public servants who draw a pension should never be re-engaged; if their expertise is retained for a reduced salary, the taxpayer gains. But any deal of this nature which fails to deliver improvements, efficiencies or savings seems unlikely to bring any benefit to the taxpayer.

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Finance

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Fire chief's pension deal unlikely to benefit taxpayer

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