Friday, October 26, 2012

Local Government workers to save the world. Official.

Well, perhaps not the world.

And perhaps "authoritative" rather than "official."

The Future Housing Commission established by the Royal Institution of British Architects (RIBA) believes that the funds held in the Local Government Pension Scheme (LGPS) could provide resources to enable a massive increase in the building of much needed new homes (http://m.architectsjournal.co.uk/8637758.article).

Obviously part of me wants to express exasperation that, three years into a pay freeze, the collective pension pot of predominantly low paid local government workers is looked to to help rescue our economy and society from a crisis not of our making (particularly when it's some of the "great and the good" who've found this new use for the funds set aside for the retirement income of home helps and teaching assistants).

Local government workers should set aside any such emotional response however - because proactive investment of the considerable sums held in the LGPS could produce significant social benefits for the communities in which we live.

The Local Government Association aren't rejecting the idea (http://www.insidehousing.co.uk/development/council-pension-pots-could-lead-housing-revolution/6524374.article) and they're right not to.

At the moment, the billions held in the various separate pension funds which comprise the LGPS are invested purely in order to get the best return with the least risk. This predominantly passive approach means that the funds have little influence shaping the economy around them.

For my money (and some of it is) I think there is a lot to be said for an active approach to investing our money in ways which will produce social benefits as well as a satisfactory financial return.

This approach might even help to protect the LGPS in future. The reason why local government workers are the only public servants not (in their great majority at least) set to pay increased pension contributions alongside the cheapening of our pensions is because an exodus from the LGPS would devastate local government finance.

If, in future, housing policy also comes to depend upon the health of our pension funds that also may not do us any harm. We'll obviously need more democratic governance of the scheme if it is to be used in this way - and a decent pay offer to those of us whose money could help to end the housing crisis might also ne a nice gesture...

(And just to be clear, a tiny increase with an attack on sick pay would not be such a gesture)(http://www.lge.gov.uk/lge/core/page.do?pageId=19195377)

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