News Roundup: LGPS Deficits Plan, Lancs & London Pensions, Wandsworth’s Rating, Bankruptcy Rules
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LGPS board moots plan to cut deficits
The Local Government Pension Scheme Advisory Board has unveiled a four-point action plan to cut the LGPS’s £47bn deficit. Brian Strutton, the board’s cost management committee, said the body wanted ministers to grant powers to measure all deficits more accurately, advise funds on managing debt, provide direct help to struggling funds and to “make proposals for reducing the burden of deficits”. He said, writing in the Local Government Chronicle, government’s focus on banning the use of active investment and merging funds “meant that the real problem of deficits was ignored”.
Funds tie up set for sign-off
Lancashire County Pension Fund and London Pension Fund Authority are set to sign off a new asset liability partnership in July. The governing boards of both funds will consider the proposals simultaneously on 2 July. The new £10bn pooled asset fund would see each pension fund retain its separate identity and local accountability.
Wandsworth ratings affirmed
Ratings agency Fitch has affirmed the London Borough of Wandsworth’s long-term foreign and currency issuer default ratings (IDRs) at AA+ with stable outlooks, and its short term foreign currency IDR at F1+. It said the ratings reflect Wandsworth’s “strong socio-economic profile, the strong institutional framework of the UK, and the borough’s strong track record of focused financial management, which includes conservative budgeting, prudent investment policies and its low level of debt”. But it added that the borough has limited flexibility to raise revenue and a low operating margin.
Guildford keeps Aa1 rating
Meanwhile, rival agency Moody’s has maintained Guildford Borough Council’s Aa1 long term issuer rating. The ratings firm said that the council has a strong track record of budget planning, a relatively diversified revenue base and good liquidity levels relative to its operating responsibilities.
Bankruptcy rule changes ‘could hurt councils’
Councils could be hit hard by a rise in the bankruptcy threshold, according to an accountancy firm. From October, creditors must be owed more than £5,000 before they can initiate bankruptcy, a rise from the current level of £750. Moore Stephens obtained figures showing that 15% of such orders were made for debts of less than the new threshold during 2013/14.
BNP Paribas wins Isle of Wight pension mandate
BNP Paribas Securities Services has won a mandate to provide custody services to the Isle of Wight Local Government Pension Scheme (LGPS). The bank will provide the fund with global custody, investment accounting, cash management and foreign exchange services. The mandate was awarded through government LGPS framework for provision of custody services.
6,000 jobs lost from culture and leisure services
Staff reductions and funding cuts made to local authority culture and leisure services are falling more heavily on sports programmes and libraries than the arts, according to a new report by the Chief Cultural & Leisure Officers Association. Over the last three years 10% of local authorities report closing or decommissioning arts services, while 20% closed sports and leisure services. Extrapolating responses from 52 councils, it estimates that 6,000 jobs could have been lost nationally from all of the areas.
