The funding deficit of the Local Government Pension Scheme (LGPS) has fallen to £37bn from £46.8bn in three years, according to its latest valuation.

The report shows that LGPS assets were worth £216.4bn on 31 March 2016 while the scheme’s liabilities were valued at £253.6bn.

That compares with assets of £180.5bn and liabilities of £227.3bn – or a funding ratio of 79.4% - in 2014.

The LGPS funding ratio dropped significantly in the 1990s after local authorities took contribution holidays, but officials have outlined plans to improve the scheme’s financial health.

Cllr Roger Phillips, chair of the advisory board, said reforms piloted last year would ‘enable us to assess and benchmark the overall health of the scheme relative to other large public or private sector pension schemes’.