Ideas before their time

It is no secret that every year Babergh District Council faces a difficult time balancing its budget and during the course of the year the problem is resolved by cutting costs, using reserves, deferring expenditure etc. This year is no different, despite the savings being achieved by amalgamating departments with Mid Suffolk District Council. One interesting idea this year was to defer some of the pay-down of the pensions deficit. The deficit which was mainly caused by previously contribution holidays soaks up just under a million pounds a year. Deficit fluctuations in the past have been as high as  a positive  £19 million which completely dwarfed anything we might do on an annual basis using current funds. All was going well and there was a good head of steam developing behind the idea of seeking a review of the contribution schedule. Alas between the 31st March valuation and 30th September’s (made available to us at the end of November ) the deficit had grown from 19.8%  to 30.5% of the fund’s liabilities. Any review of the contribution schedule would have to take into account the deficit increase and on a cash flow basis we could end up being worse off. So we need to wait and hope that the markets recover by 2013 when the actuary once again consults the auguries and issues his pronouncements. (Unless of course we can find another reason to change current arrangements).

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