Race to beat MiFID II deadline
Only six out of the UK’s 92 Local Government Pension Scheme funds have opted up to professional status, with less than a month to go before MIFID II rules kick in. Bedford, Bromley, Cumbria, Lambeth, Redbridge and Suffolk have all completed their move in the past month, according to the LGPS Advisory Board. Pension funds remaining at the default “retail” status after 3 January will be limited in the financial instruments and providers then can access.
Worcestershire makes £20m real return investment
Worcestershire County Council Pension Fund has placed £20m with AEW’s UK real return strategy. The fund, now worth £86m, invests in alternative sectors such as care homes and targets a real total return of 4%, delivering 9% for the year to September 2017. Mark Forrester, finance manager at Worcestershire County Council, said: “We have been impressed with the AEW team’s track record and performance-driven strategy in deciding where to make our allocation. We have been looking to reposition the Worcestershire County Council Pension Fund into real assets and the AEW UK Real Return Fund seemed a natural fit for our investment approach.”
Newham writes off £52m Olympic stadium investment
London Borough of Newham has written off the £52m it invested in the business running the former 2012 Olympic Games stadium in the borough. In September, the council agreed to relinquish its share in E20, the stadium operating business, in an attempt to put funding of the running costs on a stable basis. Newham mayor Sir Robin Wales said: “Our decision to invest was based on the entirely reasonable assumption that the previous mayoral administration carried out its contract negotiations for E20 with due diligence. Those contracts have now been found to be onerous and, if the stadium is to return to profitability, they must be revisited by the new mayor of London and his team.” The council said that regeneration benefits outweigh the loss.
Social services spending rises 5%
Councils are estimated to have spent £23.2bn on services during the second quarter of the year, up 3.8% on the same period last year. Spending on social protection, covering adult and childrens’ social care, rose by £320m compared to last year, up more than 5% year-on-year. Forecast total service expenditure for the whole of 2017-18 reported in quarter two is £90.1bn, 1% lower than the budget estimate of £91.0bn reported by local authorities prior to the start of the financial year.
Planning for hosuing cash available
Councils have been asked to bid for £11m to assist with the planning of new housing. The cash, split over two years from 2017/18, will be administered under three funding streams — a joint working fund, a design quality fund and an innovation fund. The maximum expected to be granted to an individual bid is £250,000, the government said. A decision on successful bids is expected by the end of January.
Unions mull pay offer
Local government workers have been offered a pay rise of 2% a year for next year and the year after. The local government employers are also proposing to give lower paid staff a higher wage rise — of up to 16% over the two years. Unions are considering the offer, and UNISON head of local government Heather Wakefield said: “The government must now come up with the cash to fund local government properly so councils have the money to give their staff a wage increase that doesn’t put more services or jobs at risk.”
Growth commission created by Basildon
Basildon Council is supporting a new commission to ensure that all in the borough benefit equally from growth. The Breakthrough Basildon Borough Commission, independent of, but supported by, the authority, is made up of local, regional and national experts and will produce recommendations on policy changes and resource allocation. Councillor Gavin Callaghan, chairman of the council’s policy and resources committee, said: “Something is holding us back from being a borough that really does create opportunity and improve lives for all our residents, wherever in the borough they live. I’m determined the council addresses this urgently. That’s why I have asked this commission of experts for their independent analysis and recommendations for action.”
