I was reading an article about final salary pensions for council workers, and the research has brought to light some incredible costs. Investment fees in the Local Government Pension Scheme average around 0.2 per cent of assets which compares favourably with the OECD average of 0.5 per cent.

In all £347million was paid out by the council pension funds to investment managers last year, up nearly 9 per cent on the £319million paid out in 2011. The overall cost of the fees would be the equivalent of adding £15 to every council tax bill in England and Wales. The increase is more than double the increase in the value of the council pension funds, which went up by nearly 4 per cent to £158.6 billion, raising fundamental questions about whether the taxpayer is getting value for money.

The figures were obtained by analysis by The Daily Telegraph of the annual reports and accounts of 89 local pension funds in England and Wales. It shows big disparities between different council funds, with some cutting fees and others seeing big increases.

For example fees paid by Lewisham jumped by 85 per cent to £3million and by 41 per cent to £8.7million in Durham. Pension fund charges fell in other parts of the country, 39 per cent in Cambridgeshire to £2.8million and down 37 per cent in Richmond-upon-Thames to £675,000. There was also a big disparity between funds, with Kent paying out nearly £4million in fees to fund managers more than Lancashire, despite having a smaller fund.

A breakdown shows taxpayers in some of the country’s poorest boroughs supporting payments to some of the City’s biggest fund managers.

Camden paid out £2.8million fund managers including £1.1million to Aberdeen Asset Management and £667,000 to Fidelity while Barking and Dagenham paid £2.2million to fund managers including Aberdeen Asset Management, Goldman Sachs, Prudential and Schroders. Somerset paid £2million to a group of fund managers including Jupiter Asset Management, Aviva Investors and JP Morgan.