Local Government Secretary Eric Pickles today unveiled proposals to free town halls to pump an extra £22bn of their pension fund investments into housing or infrastructure, taking the total potential pot to £45bn.
The move would support the Government’s growth plans to find alternative funding to support building more homes.
Pickles said: “Unlocking Town Hall pension pots so they can be used to invest in vital infrastructure projects is a common sense decision that will help this country complete on a global scale and get Britain building.
“By lifting the restrictions controlling local pension investments councils could pump a further £22bn directly into job creating infrastructure projects that will boost our economy.
A report by the Future Homes Commission earlier this month said council pension funds could be used to build rented homes in the UK without increasing the government deficit.
Fund managers are currently limited in the amount they can invest via partnership arrangements, which includes many types of infrastructure and housing investment.
Proposals out for consultation today include raising the limit of 15% to 30%.
The Local Government Pension Scheme England and Wales is administered by 89 separate local funds that hold combined investment assets worth £150bn.
Mike Leonard, Director of the Modern Masonry Alliance commented: “We welcome anything that will stimulate the building of new homes but we need more than just concepts.
“This idea began in Manchester before being promoted as original thought by RIBA. Now Mr Pickles is telling us the same story again!
“When will this Government understand that we cannot spin our way out of what is clearly a continuing recession. We need the Treasury to find the funds for 25000 public rented homes making jobs and growth a reality rather than a pipe dream!”
