Title

WHITEHALL

Investment returns must not be compromised

The announcement that chancellor George Osborne would like to see Local Government Pension Scheme (LGPS) investments pooled on a regional basis has provoked mixed reactions, writes Andrew Burns.

The chancellor's announcements at the Conservative Party conference that councils will be able to keep 100% of business rates and that he would like to see Local Government Pension Scheme (LGPS) investments pooled on a regional basis has provoked mixed reactions.

Most welcome localisation of business rates, granting civic leaders greater control over their own destiny and the ability to enjoy the fruits of stimulating economic growth and job creation.

However, there are more questions about regional pooling of LGPS funds especially from fellow treasurers and fund managers.

The Spending Review and Autumn Statement announcements in November and the current consultation on LGPS pooling will hopefully make things clearer.

The rationale for regional British Wealth Funds is that they will save hundreds of millions in investment costs and enable billions to be invested in regional infrastructure.

There are further costs to be saved from running pension scheme investments more efficiently, including through pooling.

It also makes sense to explore ways of making it easier and less costly for LGPS funds to invest in infrastructure.

The primary purpose of the LGPS is the payment of current and future pensions of local government staff and not the investment in any particular asset class.

Unlike all other large public sector pension schemes such as teachers, health and civil service (whose future liabilities will be subsidised from current taxation), local government is alone in holding real assets with which to pay its pensioners.

We need to ensure that local government pension fund investment returns are not compromised by thoughts of compulsory investment in local or regional infrastructure, from which the returns may be less certain or sub-optimal.

All investments with pensioners' contributions must be of ‘investment grade', on viable proposals with achievable returns and never vanity projects that cannot attract market investment.

Andrew Burns is immediate past president of the Society of County Treasurers

WHITEHALL

A good time for 'Our Friends in the North'?

By Paul Marinko | 10 July 2026

With its power base in northern mets the stars have started to align for the Special Interest Group of Municipal Authorities (SIGOMA) under the Labour Govern...

WHITEHALL

Insecurity: the missing piece of the productivity puzzle

By Saffron Woodcraft | 09 July 2026

New research shows reducing insecurity can boost productivity, earnings and inclusive economic growth across local communities, says Saffron Woodcraft.

WHITEHALL

A Burnham-led government urgently needs to set out a timetable for devolution in all areas of England

By Ian Miller | 09 July 2026

No10 North should dispense with the Ministry of Housing, Communities and Local Government requirement that an area must 'endure an indeterminate phase of fou...

WHITEHALL

Making the right choice for the next generation

By Emmet Regan | 09 July 2026

Emmet Regan looks at the factors to consider when choosing the best model for the delivery of children’s services during local government reorganisation.

Andrew Burns

Popular articles by Andrew Burns