The black hole in council pensions in Lincolnshire has massively expanded in the last 12 months, new figures show.

The pensions deficit at councils in the county jumped to more than £527m last year – an increase of more than 35 per cent.

The gap between money coming in and money going out of schemes has widened dramatically following a plunge in the value of investments in pension funds and the increased life expectancy of staff.

The new figures from the TaxPayer's Alliance come as town hall bosses look to make millions of pounds of savings in the face of government budget cutbacks.

Now council chiefs say a major shake-up is needed in the way the local government pension system works.

David Forbes, assistant director of finance and asset management at Lincolnshire County Council, said:

"The TaxPayers' Alliance has recognised that local government pensions are more sustainable than other public sector schemes that are unfunded, despite a deficit in council schemes.

"However, the rules governing the scheme are set by central government and they would have to initiate any action to address this."

For more on the deficits, see Saturday's Echo.