Reform has vowed to slash council tax bills by up to £350 a year by rooting out waste across public sector pensions.

Richard Tice, the party’s deputy leader, will on Monday unveil plans to overhaul council-controlled pension funds, which he says are failing to deliver value for money after becoming blinded by net zero.

The chronic mismanagement of public sector pensions is costing taxpayers around £10bn a year, according to Mr Tice, who said households were paying the price for a “gravy train culture” of high fees and bad investments.

It comes after the party carried out a detailed review of gold-plated pension schemes at Reform-controlled authorities across the country.

To be released on Monday, the review will find widespread waste fuelled by investment strategies that are too focused on net zero.

Mr Tice will also claim that complacency among investment managers and advisers has led to systemic overcharging and underperformance across one of the largest final salary pension schemes in the world.

In a speech on Monday, the former businessman will say environmental, social, and governance (ESG) goals have been hard-wired into many funds’ investment strategies – often at the expense of higher returns.

By improving performance, the Reform deputy claims, cash-strapped councils could afford to fund “a world-class social care system” or reduce council tax bills by up to £350.

The Local Government Pension Scheme in England and Wales (LGPS) is by far the biggest defined benefit scheme in the country – with almost seven million members and assets under management on course to grow to £1tn by 2040.

However, councils’ own annual reports admit that funds have repeatedly missed self-imposed performance targets and made poor investment decisions.

This includes some schemes that wasted pensioners’ money on failed green energy projects, while others bought property located hundreds of miles away from residents.

Mr Tice will say most council pension schemes are underperforming even when compared with funds that simply track the stock market.

Reform will now take steps to oust underperforming fund managers, while also introducing a simpler investment strategy focused more on profits and funding local projects, such as social housing.

Such a move will also open the door to public sector workers no longer being automatically entitled to a gold-plated final salary pension, should the party form the next government

Reform won the largest number of seats in May’s local elections, gaining control of 10 English councils – including Kent, Derbyshire, Staffordshire, Lincolnshire and Nottinghamshire.

It is also the biggest party in Leicestershire, Warwickshire and Worcestershire, which it is attempting to govern as minority administrations.

This means that Reform, which is leading Labour and the Tories in the polls, has influence over roughly £66bn in pension assets.

That is because many of its elected councillors sit on pension committees that set investment strategies and have the power to hire and fire fund managers.

Reform estimates that the 13 schemes under its influence have underperformed by an average of £1.24bn a year since 2020.

Mr Tice will also blame council funds for failing to take advantage of the lucrative discounts available to large investors.

A combination of sky-high fees and underperformance has left taxpayers losing out on £1.5bn a year across Reform’s 13 councils alone, its review will say.

If this were the case across the country, it could mean taxpayers are forfeiting up to £10bn a year through “incompetence”, according to Mr Tice.

He will use his speech to announce that Reform is taking immediate steps to negotiate down fees and root out waste across public sector pensions.

Mr Tice told The Telegraph: “A gravy train culture has developed where everyone can overcharge, no one is held to account for underperformance, and the taxpayer is taken for a ride.

“Reform is calling an end to this financial mismanagement and abuse.”

The pensions bill, backed by Rachel Reeves earlier this year, vowed to shake up local government pension schemes, which, unlike most public sector pots, are fully funded and not paid out of general taxation.

The Government’s plans will see 86 local pots merged into a series of “mega-funds” that will be controlled by the same pool managers that Reform has accused of underperformance.

The party will take steps to form its own pool, for which it is lining up its own star fund manager, meaning it could soon have control of one of the biggest schemes in the country

The Local Government Pension Scheme (LGPS) in England and Wales has been dogged by a complex web of regulation and high staff turnover in recent years.

A report by the Pensions and Lifetime Savings Association warned that “complex and multiple layers of LGPS’s oversight” had led to conflicting guidance among schemes, which are overseen by Angela Rayner’s housing department. This also meant the needs of the schemes had often become “de-prioritised, missed or misunderstood”.

Mr Tice will say: “What is the point of councils spending tens of millions each year on compliance and governance when they miss the elephant in the room of overcharging and underperformance?”

A spokesman for the Ministry of Housing, Communities and Local Government said: “We do not recognise these claims about the Local Government Pension Scheme, and are absolutely committed to making sure it provides value for money and helps drive economic growth across the UK.

“The Pensions bill will help ensure this by streamlining the pools and consolidating funding so that we can unleash the full potential of the £360bn scheme.”

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