Pickles eyes council pension pots to finance new homes
Published by 24publishing for 24dash.com in Housing and also in Central Government, Local Government, Universal Credit
Investment decisions remain for individual local pension funds, which have a duty to protect the local council taxpayers, and local services and to ensure that there are no conflicts of interest.
Councils could be able to double the amount they can legally invest from their pension funds to support the building of new homes and infrastructure, communities secretary Eric Pickles has announced.
It follows a report last month by the Future Homes Commission – commissioned by the Royal Institute of British Architects (RIBA) – concluding that six million new homes could be built across Britain in the next 20 years financed by the pension savings of more than four million council staff.
The Local Government Pension Scheme England and Wales is administered by 89 separate local funds that hold combined investment assets worth £150 billion.
Fund managers, however, are currently limited in the amount they can invest via partnership arrangements, which includes many types of infrastructure investment.
The proposals, published for consultation this week, include an option to increase the current limit of 15 per cent to 30 per cent. This, said Pickles, would clear the barriers standing in the way of better council investment giving them the scope to inject up to £45 billion in such arrangements.
Mr Pickles said: "Unlocking Town Hall pension pots so they can be used to invest in vital infrastructure projects is a common sense decision that will help this country complete on a global scale and get Britain building.
"By lifting the restrictions controlling local pension investments councils could pump a further £22billion directly into job creating infrastructure projects that will boost our economy.
"This is potentially a huge development and investment opportunity we simply cannot afford to ignore that also allows us to maintain long-term value for money for the taxpayer."
Ministers have said that investment decisions remain for individual local pension funds, which have a duty to protect the local council taxpayers, and local services and to ensure that there are no conflicts of interest.