THE public service pensions "black hole" is set to double to more than £16 billion by 2018, a leading analyst has warned.

Pensions expert Michael Johnson says that even after the implementation of the Hutton proposals on pension reform, the Office for Budget Responsibility (OBR) now expects the cashflow shortfall between public service pensions' contributions and pensions' payments to more than double from £8bn in 2011/12 to £16.2bn in 2017/18.

Mr Johnson, using figures in the Budget Red Book, notes that the shortfall is getting worse as the prediction for 2015/16 is £13.6bn, 40% higher than previously expected by the OBR, the UK Government's independent forecaster.

In an article today for the Centre for Policy Studies (CPS), the centre-right think-tank, Mr Johnson says: "This is indicative of successive governments' talent for underestimating the cost of providing public service pensions.

"Once (taxpayer-funded) employer contributions (more than £16bn last year) are added to the burgeoning cashflow shortfall, along with additional costs care of the Treasury's 25-year 'no change' pledge, the annual cost of providing public service pensions will be more than £1500 per household, by 2016, and rising rapidly."

Tim Knox, CPS director, said: "Public sector pensions will, at least partly as a result of the Coalition's reforms, be growing to such an extent they will soon represent a significant driver of the deficit.

"The 2013 Budget forecasts a public sector new borrowing requirement (PSNB) of £96bn for 2015/16 (excluding extraordinary items). At £13.6bn, the pension cashflow shortfall will then be the equivalent to 14% of the PSNB.

"If the Coalition is to keep its promise made in the 2010 agreement – that 'the deficit reduction programme takes precedence over any of the other measures in this agreement' – then it urgently needs to re-open negotiations," he added.

Early in this parliament, Chancellor George Osborne insisted the projected rise in the cost to taxpayers of public sector pensions was "unsustainable".

Lord Hutton, the former Labour work and pensions secretary, was commissioned to draw up proposals for change and the Coalition's reforms are meant to stop the cost of public sector pensions soaring to unsustainable levels by bringing them into line with the private sector.

Consequently, most public sector workers will have to work longer and have lower pensions than they were expecting, which has sparked a series of protests and strikes. The Department for Work and Pensions has insisted the new flat-rate £144 per week pension will be more sustainable and cost the taxpayer no more than the current system.

Mr Johnson, a former merchant banker, helped run David Cameron's Economic Competitiveness Policy Group when the Conservatives were in opposition. He has previously called for Mr Osborne to bring back the 10p rebate on pension assets' dividends and interest income and to scrap higher rate pensions tax relief.

In November, he wrote in an article on the think-tank's website: "They are crude and mis-directed, with distribution skewed towards the wealthy, who are increasingly treating pensions tax relief as a tax- planning tool, rather than as an incentive to save. Conversely, tax relief is poorly understood by younger workers, and lacks any emotional resonance."