COLCHESTER Council is set to use £250,000 of taxpayers’ money to increase its pensions contribution as it battles against a £51million blackhole.

As staff contributions do not cover the cost, the rise is roughly the equivalent of an annual 2.5 per cent council tax hike for residents.

Taxpayers and staff could be forced to pay more into the pension pot.

Paul Smith, councillor responsible for resources and diversity, said: “We are having to look at the pensions fund every year, and how the blackhole looks depends every year on different things.

“For instance, if it has been a good year, and we have had people retire and not so many new staff arriving, then it will not affect it too badly.

“It also depends on how our investments have done. Last year, the deficit was £51.939million and I think that was quite good because we had a good year with investments.

“I am not sure about this year. If we had invested in BP, for example, instead of Shell, then obviously it would not be so good.”

The authority’s finance and audit scrutiny panel will reveal how much bigger the deficit has got, and its response on Tuesday.

Tendring Council’s pensions blackhole has grown by £11.8million in the last year from £35.8million to £47.7million.

The authority hopes to increase contributions by £500,000 each year to reduce its long-term deficit.

The shortfall this year for Braintree Council increased by £14.736million and now stands at £61.311million.

Maldon District Council’s pension fund deficit has increased by more than £5million