The black hole in Oxfordshire's local government pension fund stands at a staggering £366m.

And that spells bad news for taxpayers, who have been warned their bills could rise and services could be cut as the county council, which administers the fund, seeks ways to recoup the deficit.

Officers at County Hall have calculated the fund, which has nearly 18,000 contributors, will be in credit by 2029.

Eligible employees currently pay six per cent of their annual earnings into the scheme, while the county council, for its employees, pays 18 per cent.

But between 2001-2004 the council was paying 15 per cent of an employee's earnings as its contribution.

Conservative county councillor Charles Shouler, cabinet member for finance, said: "The council taxpayer should be concerned about the cost of the local government pension scheme.

"The 18 per cent is a significant cost to taxpayers probably £18m a year. It will not go bust, it will continue as long as there is local government, but people are concerned because of the rising cost to the taxpayer.

"It is cause for concern but the corrective action has been taken so that in the timescale the assets equal the liabilities."

The scheme is open to all local government employees, but does not include teachers or firefighters, who pay into separate funds.

Yesterday,fri, may 12 the Government announced that from 2012 pensions would increase in line with average earnings and by 2050 the age of retirement would rise to 68.

Pensioners' champion Bill Jupp, 74, of Arlington Drive, Marston, draws £84.25 a week.

He said: "The people who have come through the worst periods this country has known are being left out we are the forgotten generation. This announcement is no good for us, we want something now."

In Oxfordshire the local government pension fund has 17,615 contributing employees, 7,438 pensioners and 7,753 deferred pensioners (those who have left the fund and frozen their benefits).

A county council spokesman said: "The last actuarial valuation was on March 31, 2004 when the pension fund deficit was £366m. Since then the fund has enjoyed two years of very strong investment returns.

"The next actuarial valuation will take place at 31 March, 2007 and we will not know until after this date what the new deficit will be."