Scottish Government
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Joint agreement on police and fire pensions
The Scottish Government and COSLA have reached agreement on the extra funding needed to offset the pressures on the police service and the fire and rescue service caused by a record numbers of retirals.
A way forward on future pensions reform has also been agreed.
Justice Secretary Kenny MacAskill and COSLA's President Pat Watters yesterday welcomed the deal that will ensure pension costs in both services are fully funded. The deal also means that Scotland's police forces will be in the best possible position to ensure that the commitment in the Concordat to make an additional 1,000 police officers available in communities can be delivered.
Under the deal, which has been worked through and agreed under the partnership arrangement in place since the Concordat, the Scottish Government will provide an extra £20 million and the Local Government family will also provide an extra £20 million to meet the additional pressures expected as a result of a high number of retirals in the police service and in the fire and rescue service next year.
Kenny MacAskill said:
"The Scottish Government is committed to supporting our police and fire services as they work to make our country safer and stronger.
"This significant extra funding, which we have now agreed with COSLA, will ensure police forces have sufficient funds to maintain officer numbers and continue with their existing recruitment plans, which are in addition to the 1,000 extra officers that this Government is funding.
"As well as dealing with the exceptional pensions pressure we are facing next year, we have also agreed with COSLA how to address the longer term pensions issues by reforming the management of police and fire pensions which will provide greater certainty for our police and fire boards."
Councillor Watters said:
"Alongside the Scottish Government, Local Government is firmly committed to supporting our police and fire and rescue services in their work to make our country safer and stronger.
"Local Government has already found significant resources to meet pensions pressures in 2008-09. Our commitment to find further resources next year demonstrates our resolve not only to recognise the needs of our employees but also how best we can fulfil our part of the Concordat."
The additional pensions costs that arise in 2009-10 are significant. In addition to making available additional resources, COSLA and the Scottish Government have agreed to address the longer term pensions issues by reforming the management of police and fire pensions. At present, police and fire budgets have to cope with variable levels of pension costs depending on the numbers of police officers and firefighters who retire. We plan to move to a system whereby police forces and fire and rescue service pension costs will be a fixed proportion of salary costs, which will provide greater certainty for Police and Fire Boards. We expect to be able to move to this new approach from 20010-11, with transitional arrangements to pool the risk for 2009-10.
Those transitional arrangements reduce the pensions pressure to £40m in 2009-10. To meet this remaining pressure, the Scottish Government has agreed to provide an additional £20m towards those costs, with the local government family contributing the remaining £20m.
This funding is over and above the additional £32.8 million which the Scottish Government has made available this year and the £22.3 million which the Government will make available in 2009-10 to meet the additional costs of changes in the commutation rates for police and fire officers. It is also on top of the additional £37 million that the local government family is making available in 2008-09 to meet pension pressures.
The extra funding now agreed is fully in line with the Concordat. The Scottish Government's contribution will be confirmed in the Budget Bill for 2009-10.
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