HEALTH Secretary Nicola Sturgeon has defended the Scottish Government's decision to increase public sector pension contributions.

She warned that frontline NHS services would be hit because of a £50 million cut to the health budget next year if the Scottish Government refused to implement Westminster's controversial pension reforms.

The changes would raise both the amount public sector workers must pay into their pension and the age of retirement as well as introduce career-average pensions.

Watched by striking NHS Lothian workers, she told Holyrood's Health Committee she faced "Hobson's Choice" because if she spent the money on pensions "I will have to cut that amount elsewhere".

"We have been backed into a corner by the UK Government on this," she said.

Ms Sturgeon said the Scottish Government had repeatedly made clear its opposition to increasing contributions "both at this time and this way".

She added: "We have repeatedly called on the UK Government to rethink its policy at a time of pay freezes, increases in national insurance contributions, higher VAT, increasing inflation and rising fuel costs.

"We believe it is wrong to require the public service to have to increase their pension contributions at this time. We go further and consider that pensions should be a matter within the remit and decision-making power of this Parliament."

Chief Secretary to the Treasury Danny Alexander told Finance Secretary John Swinney last year that delays in implementing the pension changes would mean adjustments to the Scottish Budget.

Mr Alexander said Scotland had benefited from assumptions that contributions to the NHS, teachers, police and fire pension schemes in Scotland would increase and that this had been reflected in funding allocations to Holyrood in the spending review settlement.

Cuts to the Scottish Budget would amount to £8.4m each month from April if the pension changes were not implemented and Ms Sturgeon warned £4.6m of that would be from the health budget.

She said: "I cannot allow the NHS budget to take that kind of hit because it would hit frontline services."

Ms Sturgeon, who will meet representatives from the unions today to discuss pensions, said measures had been put in place to protect the lowest paid NHS workers, with no increases in contributions for those earning less than £26,000.

She also stressed that, so far, the changes were for 2012-13 and that no decisions have been taken for the two following years.

She added: "I don't believe the UK Government's policy in terms of increased pensions contributions is about sustainability of pensions, I believe it is about deficit reduction."

Tam Waterson, who chairs Unison's Scottish health committee, said: "The Scottish Government can't get away from the fact it is their decision to increase pension contributions by 3.2%."

He added: "We believe we can find savings within the NHS system to the tune of £50m. An audit has already shown £55m surplus."

Unison's Scottish organiser John Gallacher said: "Unison will be using these talks to explore funding alternatives that don't involve taking money out of Scottish health workers' pockets to give to the Treasury as a windfall tax."