THE region’s councils are facing a £3.5bn pensions blackhole, a report claims today.

The TaxPayers’ Alliance (TPA) said that nationally local government pension deficits exceeded £53bn in 2008-9, with 15 councils facing shortfalls of more than £500m.

The total was £9bn up on the year before, with the value of council pension assets falling by £21bn over the 12 months.

In the North-East and North Yorkshire, the total deficit tops £3.5bn.

John O’Connell, policy analyst at the TPA, said: “These deficits are a huge ticking timebomb.

“Investment portfolios will have taken a beating in the credit crunch, but that is only part of the problem.”

And he added: “No matter how good the markets get, the inescapable fact is that local authorities are running unsustainable final salary schemes that are now all but extinct in the private sector.”

However, Unison national secretary Heather Wakefield said: “Local government pensions are affordable and sustainable.

We spent many months in lengthy negotiations to agree a scheme that did just that.”

Jo Miller, deputy chief executive of the Local Government Association, said: “It is extraordinary that the Tax- Payers’ Alliance is attacking the pensions that dedicated lollipop ladies, bin men and librarians have paid into every working day.

“The average pension paid out under the scheme is just £4,044 a year to people, many of whom have toiled all their working lives to provide services to local residents.

“These vital services cannot be provided by robots. If we as a society want to recruit the best people and retain them we need to pay for it.”

A spokeswoman for North Yorkshire County Council said the North Yorkshire Pension Fund, which covers all councils in North Yorkshire, outperformed all other local government pension scheme funds last year.

“The figures provided by the TaxPayers’ Alliance show the value of the fund and deficit as at March 2009, when financial markets around the world were at their lowest ebb,” she said.

“At December last year, the value of the fund had increased by £400m.”

South Tyneside Council, which leads on pensions for North-East local authorities, did not respond to The Northern Echo’s request for comment.