A report claims today that the Derbyshire councils' pensions' black hole stands at a massive £3.5billion.

According to the TaxPayers' Alliance, "Nationally local government pension deficits exceeded £53bn in 2008-9, with 15 councils facing shortfalls of more than £500m".

John O'Connell, policy analyst at the TPA, said, "These deficits are a huge ticking time bomb".

"Investment portfolios will have taken a beating in the credit crunch, but that is only part of the problem. No matter how good the markets get, the inescapable fact is that local authorities are running unsustainable final salary schemes that are now all but extinct in the private sector".

A spokeswoman for North Yorkshire County Council stated that the North Yorkshire Pension Fund, which covers all councils in North Yorkshire, outperformed all other local Government pension scheme funds last year.

"The figures provided by the TaxPayers' Alliance show the value of the fund and deficit as at March 2009, when financial markets around the world were at their lowest ebb", she said.

"At December last year, the value of the fund had increased by £400m".

South Tyneside Council, which covers on pensions for North-East local authorities, did not respond to the request for comment.