Everyone does. But why is it happening?

It is because local councils are completely incompetent? No, actually. The Audit Office says most are rather well run by public sector standards.

Is it because the councillors are venal? No, definitely not. Their expenses remain small, they don't draw salaries and there are few which pay staff obscene amounts.

So why then? Simple answer - pensions. For an average local council, 25 to 30 per cent of all their income goes to paying pensions to retired staff. And that percentage goes up every year far faster than inflation. So between a quarter and a third of what you pay in Council Tax goes straight to lots and lots of public sector workers who retire at 60 and have their pensions inflation-proofed for the next 40 years. In 10 years’ time, unless some competent government grasps the nettle, it will be in excess of 40 pence out of every pound you pay (and then you definitely won't get your rubbish collected at all).

And that's why your local swimming pool has just closed down, because the council is legally obliged to keep paying the pensions, cannot raise taxes at more than circa four per cent, and has to balance its budget, so every year more and more services disappear. It won't be too long before the whole of some council budgets will just be a transfer of money direct from you to some lucky teacher or departmental clerk who has pulled three cherries at the age of 60.

The same applies right across the public sector. At the university where I sit on the finance committee, 12.5 per cent of all our income (that's all the fees paid by students, all the research grants etc) goes straight to fund staff pensions. And that number is rising so fast it will soon be 20 per cent. That's the single major reason student fees will rise from 2010. But does anyone tell you that?

Policy Exchange, an independent financial group, estimated this month that there were 5.2 million current public sector workers who can retire at 60 with inflation-proofed pensions. But there isn't any money to pay them with. It will cost us taxpayers 80 per cent of this year's Gross Domestic Product (£1.1 trillion) just to meet today's obligations. That's ignoring completely tomorrow and the future (£18,500 from each and every person in the UK, and just for today's obligations).

There were many who said that GM was too big to fail, but where GM has gone many look in danger of following. Numerous large UK companies have pension obligations way in excess of any clear means of paying them. British Airways is perhaps the most obvious example.

And it isn't because companies are going overboard on pensions. Only 22 of the FTSE top 100 companies offer a traditional scheme to new employees.

In our own industry, DMGT's attempt to sell its regional newspapers was eventually damaged (perhaps fatally) because the pension obligations a buyer would have to take on were just too onerous. The stock market is saying you could buy Trinity Mirror and Johnson Press (the other large quoted newspaper groups) for less than 18 months of their post-tax profits. That means you could buy those businesses, get every single penny back in 18 months and still own the business. Too good to be true? Of course, or someone would have done it.
The pension obligations of the company are just too great and a buyer will have to take them on. This remains the economic elephant in the room.

My own view is that we are going to see a lot of GMs in the US and the UK in the next five years. We will see large and medium sized companies reaching the point where they can't go on because their obligations to potential pensioners will just be too great. They will be zombie companies.

The way society, and particularly media, will change is that the big behemoths will inevitably break up. Their dinner will be eaten by much smaller, focused companies which run perhaps one or two events or magazines and which operate with limited staff and limited obligations. They won't have pension or health care obligations and they won't ever create them.

We are beginning to see this now. DMGT's decision that it can't manage consumer events any longer, after 100 years and great brand names, and the fact that some of these assets went in a management buy out is typical. That is going to happen everywhere. The larger groups will dispose of their assets, and the best people to buy are the people who run the events. So start saving.

I think this will become evident in the next three years. These long-term obligations, coupled with the debt levels of many of the larger groups, will lead to cracks appearing in the load-bearing walls. The assets won't disappear, but via variouis complex financial mechanisms, they will gradually become owned by far smaller, nimbler and obligation-free operations.

Everyone who works in the private sector will have to fend for themselves, while anyone sucking at Gordon Brown's public tit (and average public sector wages are now higher than private wages) is going to be sitting pretty.

Even today, the average private sector employee pays more in pension contributions to public sector employees (via taxes) than they do into their own pension schemes. It's amazing but it's true.
The GM analogy is a good one. The compnay’s obligations (mainly pensions) which had been gathering like barnacles on a ship's hull over decades, eventually slowed the ship down to the point that it stopped dead in the water. Almost any big, established company is terribly vulnerable.

It is easy to say 'small is beautiful'. But you need to explain why 'big is really rather ugly'.

See the box opposite for why...