News Round-up: LGPS £1bn infra fund, Javid warns 10 councils, BNY wins LPP admin mandate, CFO’s biggest pressure…
0LGPS infrastructure fund grows to more than £1bn
The size of the GLIL infrastructure fund has more than doubled to £1.272bn after investment from three additional local authority pension funds. West Yorkshire Pension Fund, Merseyside Pension Fund and Lancashire Pension Fund have joined the GLIL venture expanding the size of the fund from its initial £500m. GLIL is a joint venture between Greater Manchester Pension Fund and the London Pensions Fund Authority. A statement from GLIL said: “The expansion allows GLIL Infrastructure access to a greater pool of financial commitments and investment expertise from its contributing funds, cementing it as a significant and serious investor in the UK infrastructure market.”
10 councils warned of “consequences” by communities secretary
Sajid Javid, the communities secretary, has warned of “consequences” for 10 councils that failed to take up four-year settlements for their central government funding. Speaking in the House of Commons this week, Javid was responding to Harrow East MP Bob Blackman when he revealed the figure. He also outed Harrow council as being among the ten. Javid said: “In practice, that means that those councils will have an annual, year-by-year settlement, which will deny local people the certainty that they seek. It also means that they have not put together efficiency plans, as the other councils will have done. It is a shame that they did not accept the settlement. That was entirely up to them, but it will have consequences.”
BNY Mellon wins Local Pensions Partnership contract
The Local Pensions Partnership (LPP) has appointed BNY Mellon to provide a raft of account services to its £5bn global equity fund. BNY will provide fund accounting, transfer agency, and custody services, among others, to the fund. LPP is the joint fund for Lancashire County Pension Fund and London Pensions Fund Authority. Bruce Carnaby, head of investment operations at LPP, said: “BNY Mellon’s depositary oversight and performance reporting capabilities, and its robust approach to managing the transition of assets to the global equity fund, made them our preferred custodian when launching our first tax-transparent pooling vehicle.”
CFOs say adult social care the biggest budget pressure
Adult social care and children’s services face the most significant budget pressures in comparison to other services, according to the latest CIPFA CFO Confidence Survey. The poll revealed that 86% of local authority finance chiefs regard adult social care as being among the three areas under the greatest financial strain, while 85% also named children’s services. Sean Nolan, head of local government at CIPFA, said: “All the evidence CIPFA is receiving is indicating that the continuing rise in spending on social care is putting a squeeze on other services. Councils can’t defy gravity, keep taking so much money out of the system, and expect all their services to stand up.”
Fossil fuels to go from Southwark’s pension fund
Southwark council’s pension fund is to divest itself of fossil fuel investments, following the lead set by Waltham Forest earlier in the year. The council made the decision this week saying it would look for opportunities to invest in sustainable energy infra structure through the London CIV. Cllr Fiona Colley, Southwark’s cabinet member for finance, said: “The commitment to cut pension investment in fossil fuels long-term … is a measured and carefully considered decision based not only on ethical practice and the council’s continued drive to reduce exposure to fossil fuel, but also on reducing the financial risk of investing in traditional energy sources, which will ultimately become obsolete.”
Scottish councils face £700m cut in funding
Councils in Scotland could see their funding cut by £700m by the end of the current Holyrood parliament. The news comes in a report from the Fraser Allander Institute at the University of Strathclyde, and says the funding could fall because Scotland’s block grant from Westminster will reduce by 3.1% from 2016-17 to 2019-20. Current affairs website Holyrood reports the potential cuts would follow cuts of £350m last year.
