Pensions decision follows cull of Tory councillors

A review was ordered after controversy surrounded the 364,205 paid to the pension fund of East Riding Council's director of corporate resources Sue Lockwood who took early retirement this year.

But yesterday Tory councillors – including those who had been critical of the payment to Ms Lockwood – voted along with Labour to continue giving employees, aged 55 and over with 30 years service, top-ups, but reduced from five to two years' contributions.

The meeting followed the disclosure that 10 Tory councillors, including council leader Steve Parnaby and deputy Jonathan Owen, were not being allowed to represent the party in next year's elections, although they can appeal.

This came after months of behind-the-scenes plotting by Tory colleagues.

But despite the divisions, the group did not break rank yesterday. The Tories – including Cabinet member Matthew Grove, one of the most senior figures to escape the cull – claimed giving employees augmented pensions was cheaper than making them redundant.

Review panel chairman Labour councillor Laurie Cross said the average payout to those taking early retirement was 4,176, adding: "This is the reality of public sector gold-plated pensions."

The Lib Dems, whose motion to scrap the payments failed to win any support, warned the top-ups would cost the taxpayer an estimated 3.3m over five years.

Coun Stephen Sloan, who represents South West Holderness, said he couldn't understand how "we expect our tax payers to give free handouts".

Two years ago councillors were criticised for allowing senior officers, including Ms Lockwood, to take large backdated pay rises but claimed it was to "retain and recruit staff". Coun Sloan said since then three directors had left and the redundancies talked about were "a figment of peoples' imagination – a red herring".

A spokesman for the Taxpayers' Alliance, said: "I am surprised that elements of the Conservative group who have been extremely critical of the 85-year rule are still now favouring an enhancement.

"This is more about personal agendas and people positioning themselves for the forthcoming leadership contest."