Public pension deficit at £1.1trn

PUBLIC sector pension liabilities stand at a staggering £1.1 trillion, the Treasury will reveal today when it publishes accounts drawn up to private sector standards.

The figure has jumped from £770bn in 2008 – when the government last revealed the accrued pension rights for public sector workers – due to worsening market conditions, a Treasury source told City A.M.

George Osborne, the chancellor, is expected to use the shock figure as proof the government needs to prune spiralling public sector pensions.

The Treasury is also expected to reveal the eye-watering cost of providing a state pension. The Institute of Economic Affairs believes current state pension liabilities are £1.1 trillion while future liabilities are already £1.7 trillion.

Meanwhile, the liabilities for private finance initiative projects has hit £40bn – with just £5bn of that appearing on the government’s books.

Jesse Norman, a Tory MP on the Treasury select committee, said the figures “reinforced the case for a proper programme for making savings in PFI projects”.

In total, up to £4 trillion of additional debt will be added to the UK’s balance sheet today, as the government makes good on its promise to publish a set of accounts drawn up on the same basis as companies.

The new accounts – known as “whole of government accounts” – will not change the figures used to compare government debt and borrowing internationally.