THE UK Government has been accused of breaking faith with Scottish ministers over changes to pension arrangements that will affect half a million public sector workers in Scotland.
Finance Secretary John Swinney is angry UK Government plans will pre-empt negotiations already taking place between Scottish ministers, employer groups and trades unions representing the police, fire services, local government workers, the health service and teachers.
His reaction follows a letter from Chief Secretary to the Treasury Danny Alexander outlining Westminster's plans to use the Retail Price Index, instead of the normally faster-rising Consumer Price Index to measure price rises influencing pension upgrades, saving almost £6 billion a year by 2014.
Mr Swinney said the intervention was "astounding".
A source close to the Holyrood minister said the "goalposts have been shifted" and would constrain the way he was able to negotiate schemes tailored to Scottish circumstances.
Westminster confirmed its intention to change public service pensions last month but indications that new legislation would align pension ages with the State Pension age have only now emerged.
For police, it could affect deals for long-serving officers that entitle them to retire at 50 on full pensions or settlements agreed after 2006 allowing them to benefit from a full pension at 55 if they have served 35 years. However, other workers will also be hit.
Although the Scottish Government can control pay rises for the public sector workers it employs directly, pensions legislation is reserved to Westminster.
The Scottish Government claimed UK ministers had previously said the only restriction to be placed on its ability to negotiate the terms of its own deals on pensions would be that any shortfall in revenue would be met from the block grant from Westminster. Mr Swinney has now written to Mr Alexander seeking clarity on his plans.
He said: "Previous statements by UK ministers made it clear the Scottish Government was free to design schemes which suit Scotland's needs and we have entered into negotiations on that basis in good faith. So it is astounding the UK Government is now seeking to place legislative restrictions on our freedom to negotiate with our own workforce. This damages our ability to ensure a fair and equitable agreement taking into account all views and reflecting Scottish circumstances.
"There has been no prior indication of the UK Government's plans to do this and I am sure this news will surprise employees and trade unions as much as it did the Scottish Government."
Mr Swinney said public sector workers deserved certainty.
He added: "Not content with threatening budget cuts if we choose to treat workers differently, the UK Government's failure to properly inform the Scottish Government of planned legislative constraints undermines our ability, and that of local government, to put in place a pensions agreement that meets the needs of public sector employees."
He said UK ministers have had "numerous" opportunities to explain their plans and it was with "dismay" he was having to request urgent clarity on issues which affected so many public sector employees in Scotland.
He added: "I hope that the UK Government will now, for the last time, tell us exactly what they plan to do."
Doctors will be balloted on industrial action in May over planned NHS pension changes.
Last month the Court of Appeal in London threw out a bid to overturn the move by unions. Judge Lord Neuberger said: "The Government believed the state of the economy was grave, and any savings that could properly be made should be made."
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