All of the focus recently has been on those councils who invested cash in Icelandic Banks. However, even in the case of those councils with the largest amounts at risk, the potential losses are dwarfed by the impact of falling stock markets on pension funds in the last few weeks. A typical ￡1bn fund will have seen its value fall by ￡300m with no prospect of meaningful recovery in the foreseeable future. This has prompted the usual reaction from the tabloid press and councillors. Public sector pensions are too generous, unsustainable, unafford-able, unfair etc etc. The local government scheme comes in for more criticism than most as it is one of the few funded public sector schemes and the losses are transparent.
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