TAXPAYERS could be left to cover a £166,000 pension bill if a community facility goes bankrupt.
Labour members at North Tyneside Council have used their majority to allow the authority to be guarantor for Wallsend People’s Centre as it sorts out a £166,000 pension fund deficit – saying it continues from an agreement set in 1992.
But Conservative councillors have hit out at the situation, claiming the popular centre has links with trade unions – something which Labour group leader Coun Jim Allan said was unsubstantiated and incorrect.
Conservative leader Coun Michael McIntyre said: “We presented full council with evidence and explained why we felt this was not an appropriate use of council taxpayers money.
“I am sure that the vast majority of residents would not want to see £166,000 of their money being used to prop up the pension fund of an organisation which has links to political organisations.”
Moves were also approved to allow future employees of the People’s Centre to join the pension scheme.
Coun McIntyre hit out at Labour councillors using their majority to vote through their motions despite any potential risks, adding: “This makes matters even worse.
“Labour’s actions now means that council taxpayers have an unlimited and unquantified liability to fund index-linked pensions for the future People’s Centre employees should any shortfall occur.
“This just isn’t right or fair, especially when council staff are losing their jobs and local residents are struggling to make ends meet.”
But Coun Allan said the pension scheme at the People’s Centre has been covered by the council since 1992 without any previous problems, the situation only arising following an audit.
He said: “It hasn’t been a problem for 20 years yet now the Conservatives make a big issue out of it.
“For the Conservatives to make allegations against trade unions in a council chamber is not what I would expect from senior politicians.
“Wallsend People’s Centres does a good job, and it’s helped thousands of people over the years.”