News & Views‎ > ‎

Chancellor grabs local pension fund assets

posted 8 Feb 2016, 05:26 by Peter Webb

As the council tax decision season gets into full swing we see headlines indicating that a “3.9% tax rise would not plug funding gaps” and another headline “Waverley facing shortfall of £61m for projects” which is known to relate to the difficult issue of new housing/population growth implications for infrastructure and services. Additionally and we have not been properly informed about this, it is  policy to transfer from central to local funding as happened in transport (subsidy versus ticket price). The squeals from County Hall tell us that the Revenue Support Grant is being phased out. 

 And now, presumably in desperation, the Chancellor intends to take over local pension fund assets. Within weeks LGPS funds must hand over their initial plans to government for pooling their assets to raise infrastructure investment effective from 2018. Already the "Border to coast pool" is led by Cumbria with Surrey and East Riding (an odd assortment) and with 11 others considering joining.

 Does that mean diverted "investment" but still  to  secure pensions for past service or will he strip the funds to empty them like the national insurance fund leaving taxpayers to pay a second time for past service plus employee contributions ? If the former the investment in infrastructure will have to be in trust, secure, income generating and cashable. That seems unlikely on precedent or operable by a still financially illiterate  regime.

Comments