News round-up: Infrastructure rate, Scottish LGPS, devolution spending, auditor concerns
0Scottish LGPS to consider pooling
A similar LGPS pooling process to the one currently underway in England and Wales is to be considered by the Scottish Local Government Pension Scheme Advisory Board (SAB). According to a report to the Strathclyde Pension Fund committee earlier this month, an options appraisal on the management structure of the scheme in Scotland will be produced in early 2017. The review will consider retaining the status quo, undertaking pooling or full mergers into one, two or three funds. The report said: “Following consideration of the options appraisal by the SAB, a consultation process will follow with all stakeholders before the SAB makes any recommendations to Scottish ministers.”
Government unveils more details of local infrastructure rate
Section 151 officers would be required to sign-off value for money assessments on projects applying for the government’s proposed new local infrastructure borrowing rate. Proposals to lend up to £1bn through the Public Loan Works Board at rates of gilts plus 60 basis points were announced during the Autumn Statement. A government consultation this week said that the loans would be available for projects in transport, energy, flood defences, water, waste and digital communications. A government statement said: “The government’s current proposal is that councils would be required to produce analysis and an estimate of net present value for the project, signed off by the section 151 officer, in line with Green Book appraisal guidance. Full details would be set out in due course, but this could include an estimate of net present value, a high level business case, a borrowing profile and a risk assessment.”
MPs seek clarity over devolution spending responsibility
Central government must clarify lines of responsibility for devolved funding, according to the Public Accounts Committee. In a new report, it said there was “considerable scope for tension between local government, required to deliver and maintain services within a devolved budget, and central government which provides funding. This could result in both institutions claiming that the other is responsible for any policy failure or misspending, and neither having full accountability and oversight.”
Scottish TUC slams ‘council cuts’
The Scottish TUC has voiced worries about the scale of cuts to local authority budgets announced by the Scottish government. Responding to the Scottish budget, STUC general secretary Grahame Smith said: “The STUC is deeply concerned at the impact of the £327m budget cut on local authority services and calls on the Scottish government to reverse the proposed cut as well as giving full freedom to councils to raise, and to be accountable for the raising of, the council tax as they deem necessary.” A spokesman for the Scottish government said that the cuts only totalled £182m but are compensated for by £180m in extra council tax income and £150m in capital spending.
Auditor reveals concern over council transformation
East Dunbartonshire Council has failed to address significant concerns raised in two previous assessments, according to a Scottish public spending watchdog. In a report this week, the Accounts Commission said that improvements have been made in financial management, but concerns remain that the council does not have adequate capability to deliver its transformation programme and make its planned £27.6m savings over the next three years. Accounts Commission chairman Douglas Sinclair said: “All councils face future funding gaps and are having to make radical changes in how services are provided. East Dunbartonshire needs to significantly up its game to deliver on its ambitions.”
Palestine activists bid to challenge LGPS regulations
Activist group the Palestine Solidarity Campaign (PSC) has launched a legal bid to overturn a ban preventing local government pension schemes from establishing investment policy that conflicts with UK foreign policy. The rules came into force from 1 November and PSC said it has lodged an application for a judicial review this week. A statement from the PSC said: “We know that limiting our right to run effective BDS [boycott, divestment and sanctions] campaigns is one of a number of ways the campaign for Palestine is being undermined. But we refuse to let this happen. We will not go silent.” PSC patrons include Baroness Jenny Tonge and Labour Party leader Jeremy Corbyn.
