Chancellor, George Osborne, is ignoring an opportunity to ease soaring council pension costs as staff prepare for strikes, after a government review overlooked evidence that fund reforms could provide town halls with a £1bn annual cash boost.

Research submitted to Lord Hutton's recent Treasury-commissioned review of public sector pensions states that there would be no need for Mr Osborne's proposed £1bn annual ‘tax' on council pensions if an overhaul of Local Government Pension Scheme (LGPS) administration is undertaken.