Council Pension Investment
I want to reassure you that I will never accept the unlawful transfer of Gazans from or within Gaza, or any reduction in Gazan territory. The humanitarian situation there remains catastrophic, and I support the recent sanctions on individuals and entities involved in the settler movement. This includes the UK Government’s decision to sanction two Israeli Ministers, following their continued incitement to violence and extremist rhetoric against Palestinians.
It is important that Local Government Pension Scheme (LGPS) investments are made in accordance with general legal principles. LGPS investment strategy is a matter for administering local authorities, but they must uphold their fiduciary duties. Financial decisions should be made in the best interests of members, and they should consider risk factors relevant to investment performance, including legal, environmental and social concerns. This is essential to limiting political interference in the pension investment sector.
The recent Pensions Investment Review outlined changes to strengthen the governance framework for the LGPS, which will be brought forward in the upcoming Pension Schemes Bill. The proposed reforms will prioritise democratic accountability and introduce regular reviews, to make sure funds are being run well. I also support steps to encourage LGPS funds to make more productive investments in the UK. Administering authorities will need to set targets for local investment and they will collaborate on regional growth plans. This will bring together relevant stakeholders, like local authorities and regional mayors, to find opportunities that meet strategic objectives on growth and clean energy.
Looking ahead, the LGPS will be required to delegate investment implementation to larger asset pools. This will help deliver better value for money, access to greater expertise, and a stronger, more professional investment framework. It will also support more efficient investment in important local priorities such as housing, infrastructure, and the transition to net zero. At the same time, Ministers are working to ensure that all those involved in managing LGPS funds have the right skills and understanding to carry out their roles effectively.