Question to the Ministry of Housing, Communities and Local Government:

To ask His Majesty's Government what the barriers would be to local authorities (1) taking contribution holidays while their pension schemes are in significant surplus, and (2) using the money that would otherwise have paid employer pension contributions to fund local services.

Contribution rates for employers in the Local Government Pension Scheme are set every three years as part of a valuation process, where Pension Funds will work with actuaries and employers – including local authorities – to determine a rate which is sustainable for employers and will allow the Fund to pay out pensions in the future.

The 2025 valuation is underway, which will set contribution rates for the three years from 2026-27. Pension contributions are paid for from local authorities’ general fund and there is no ring-fenced funding stream. This means any reduction in contributions may allow for greater budget flexibility to provide local services.