Source · Select Committees · Public Accounts Committee
Recommendation 10
10
Accepted
The Local Government Pension Scheme has had a deficit in recent years, and colleges have...
Recommendation
The Local Government Pension Scheme has had a deficit in recent years, and colleges have had to make payments to help cover the deficit, in addition to their standard contributions.16 Committee Members have been told of concerns about the potential impact of the deficit repayments on the balance sheets of otherwise financially healthy 7 C&AG’s Report, para 2.5 and Figure 4 8 Committee of Public Accounts, Overseeing financial sustainability in the further education sector, Session 2015–16, HC 414, 16 December 2015 9 Q 50 10 C&AG’s Report, para 1.15 11 Association of Colleges, para 2 (MCF00001) 12 Q 54 13 C&AG’s Report, para 2.24 14 Qq 57, 59 15 C&AG’s Report, paras 2.19–2.20 16 C&AG’s Report, para 2.20 10 Managing colleges’ financial sustainability colleges. The ESFA told us that the scheme’s deficit had grown to more than £3.5 billion and that, although colleges could negotiate, the scheme provider had the power to impose deficit reduction contributions.17 Payment of VAT
Government response summary AI-generated
The government accepted the recommendation and stated that it had already provided a letter to the Committee on 18 February 2021, detailing its assessment of pension cost pressures on colleges and how these influenced funding decisions.
Summary of the government's response below — read the verbatim text to verify.
Government Response
Accepted
HM Government · verbatim extract
Accepted
2: PAC conclusion: Rising pension costs are putting significant pressure on college finances. 2: PAC recommendation: The Department should write to us, within three months, setting out what it has done to assess pension cost pressures on colleges, and how it has taken account of these in its funding decisions. 2.1 The government agrees with the Committee’s recommendation. Recommendation Implemented 2.2 A letter was provided to the Committee on 18 February 2021 setting out what the department has done to assess pension cost pressures and how it has taken account of these in its funding decisions
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