ONE of the few advantages of tough economic conditions is that they can throw into relief one or more of the fundamental problems facing the country.

One such is the ballooning cost of public sector pensions, which are now running up a trillion pound tab. The government's failure to deal with this issue is one of its more egregious acts of omission, and it must come clean with the public about what it means for existing and future generations.

It is possible that unfunded public sector pension schemes have liabilities of over £915bn. However, it is difficult to build a clear picture of the amount of debt because, astonishingly, the government has not released full figures since March 2006.

The private sector has made difficult and painful reforms to its pension provision by increasing employee contributions or migrating to more cost-effective schemes. Employer contributions into private pensions have also increased drastically.

By contrast, the numbers eligible for a public sector pension are still growing and, although reforms were made in 2006, the majority of these workers can retire at 60 or earlier, and also benefit from full inflation proofing and job transfer protection.

Clearly, the issues surrounding public sector pension provision are complex. However, as the UK goes through recession, and government spending pushes the public finances even deeper into the red, there must be a debate on the future of state schemes, lest taxpayers and businesses be left to plug a massive and growing hole.

The debt that is being racked up is truly eye watering and is set to get much worse. Taxpayers who are struggling to build their own personal pension will be lumbered for decades by the cost of covering public sector workers who retire years earlier on risk-free pensions. The private sector has had to face up to what its pension commitments will cost, and has made huge efforts to put its own house in order. Now, the government must do the same for its five million employees.

We don't know enough about the problems that are being shored up by the failure to act, and an independent commission must be set up to shine a light on the real cost of public sector pensions, and how it might be mitigated for taxpayers.

At the very least, the retirement age for public sector workers must be increased, and pension contributions raised to more realistic levels. Indexation and assumptions about mortality must also be brought into line with private sector practice. There are a plenty of options to be explored.

Public sector workers, like their private sector colleagues, are going to have to work longer.

And it is a fantasy that stronger pensions are justified because public sector workers are paid less. They aren't. No wonder that many businesses are reporting that state jobs are distorting the labour market.

Contact Steve Rankin at the CBI on 01252 360420