15 June 2010
Source: The MJ (Local government is rapidly changing - to be effective in this environment it is essential that you have access to the most up-to-date and detailed information. <strong>The MJ</strong> is the magazine that will help you to come up with practical solutions to everyday issues in this changing landscape. Every week <strong>The MJ</strong> publishes the latest news, features, editorial and industry comment on the following key issues: Management * Legislation * The White Paper * The Lyon’s Report * Regional government * CPAs * Business * Finance * Education * Adult and Children’s Services * E Government * And much more…)

‘Use pension cash’ to boost infrastructure


Laura Sharman and Mark Conrad

Plans to encourage local authority pension funds to invest in major public transport infrastructure projects have been backed by an influential think-tank.

Tom Symons, a researcher at the New Local Government Network, last week told a conference that while local authorities faced a £103m reduction in grants from the Department for Transport, they should be free to explore the possibility of council pension schemes investing in capital transport programmes.

The Local Government Pension Scheme (LGPS) currently holds assets of more than £100bn, and with town halls facing significant cuts to all infrastructure projects, including social housing, transport, education and leisure projects, the 93 LGPS funds could be a source of potential future investment.

The Local Government Association (LGA), Treasury and organisations such as the NLGN are all assessing the potential for pension funds to invest in major public services projects. The NLGN will publish its initial assessment next month.

But Mr Symons told delegates any future use of pension fund cash for public investment must offer a ‘socially desirable’ outcome and steady returns for LGPS members.

He acknowledged there would be ‘risks’ involved in using LGPS cash to invest in public projects – some investment experts had warned of low returns to pensioners and problems with taxpayers funding both council pensions and their funds’ investment in local infrastructure. But he said that even if just 1% of LGPS assets were used to invest in public infrastructure, the move would create a £1bn pot for councils.

A Whitehall pension expert told The MJ: ‘The Treasury, LGA and others are, we know, assessing the possibility of freeing up LGPS cash to invest in public infrastructure. There are risks to be considered and any review process cannot be rushed.

‘However, it is becoming increasingly clear that LGPS funds could be used to support major, local capital investment programmes. There are international precedents.’

As Whitehall grants dry up, the LGA’s finance team is also assessing the potential use of municipal bonds, and local authority money market funds, as possible new sources of investment revenue.



Your comments

investing in jumped up councils that have stupid hairbrain ideas wow who thought of this?????

browntrout., Added: Thursday, 17 June 2010 09:37 AM

Whoops! that was meant to be 3 1/2 grand to live on as a pension

Wat Tyler, Added: Wednesday, 16 June 2010 12:02 PM

So the proposal is twofold, to make us pay more for our gold plated pensions, you know the ones that give most of us about 3 1/2, now they want to raid our funds to pay for work that the government cant fund because they are paying back the banks for the loans used to bail out the banks, its a funny old world

Wat Tyler, Added: Wednesday, 16 June 2010 12:00 PM

This may be a rather simplistic observation, but this idea has a familiar ring to it. Some chap, called Maxwell I think, did something similar a few years ago.

Paul Coxhead, Facilities Management Shropshire, Added: Wednesday, 16 June 2010 11:52 AM



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