Lord Hutton, architect of the Government's public sector pension reform programme, will today warn ministers their plans to increase individual contributions could spark an exodus from the local government pension scheme.

The former welfare secretary will ask ministers seek alternative options for the self-contained and self-funded pension schemes covering 3.5 million local government workers.Most other government pensions schemes in central government and the health service are heavily dependent on exchequer funding, and he fears, otherwise, the move would provoke 'serious' risks of a mass opt-out by middle-earning local government employees.