LGPS board calls for clarity over infrastructure investment
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The Local Government Pension Scheme Advisory Board is seeking clarification on whether Theresa May’s government intends to press ahead with requirements for pooled funds to invest in infrastructure.
All eight of the proposed pools were required to outline how they intend to boost investment in infrastructure as part of their submissions to government in July.
But May, in a speech delivered shortly before she assumed the prime ministership, suggested that she saw a more active role for central government in funding infrastructure.
Jeff Houston, board secretary at the advisory board, told Room151: “Up until this point in time there has been a feeling that government is pushing us to invest in things it wouldn’t look to invest in itself or take part of risk. We have had nothing in assurances or guarantees.
“However, with the change in government, the mood music has been slightly different, indicating that the government may take a more direct role in infrastructure development or play a more supportive role.
“We want to know if there is anything in that and clarify where the policy is going.”
During her campaign to become Conservative Party leader, May pledged to introduce “more Treasury-backed project bonds for new infrastructure projects” as well as a new industrial strategy.
The idea of using pooled LGPS funds to boost investment in infrastructure was driven by former chancellor George Osborne, though it remains unclear whether the new regime remains wedded to the plan.
According to minutes from the last advisory board meeting, the letter to government requested “a meeting to discuss the government’s latest approach to infrastructure investment, particularly the issue of cost and/or risk sharing”.
Central government officials are currently working through the pooling submissions and asking questions of individual pools to satisfy themselves of their robustness.
The advisory board has written a separate letter to the Department for Communities and Local Government urging ministers to make a quick decision on the submissions.
Houston said: “People are waiting to allocate a significant amount of spending in terms of consultancy and legal advice. Without clear indication that the submissions are not going to be turned over and that they are acceptable, people are reticent to do that.”
The Chartered Institute of Public Finance and Accountancy also confirmed this week that it has prepared a document aimed at promoting good governance practice among pools.
The document, which will be released shortly, is understood to cover management of conflicts of interest and risk, reporting requirements and responsibilities of finance officers.
