MP turns to pension funds as councils struggle to provide housing
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A Labour MP said she has written to the top 10 pension funds in the country to ask them to invest in temporary accommodation in her area.
Dame Siobhain McDonagh made the comments on the BBC’s Politics Live programme on Monday, during a debate about how Labour would grow the economy and the role of long-term investment.
mallowstreet has seen a redacted version of the letter. It is addressed to the chief executive of a pension fund, asking the CEO to “help alleviate the crisis experienced by local councils including Merton in identifying safe and affordable temporary accommodation”.
In the letter, the MP for Mitcham and Morden offers to meet with them, noting that the leader of Merton council would join. As an example of how investors could help, she cites a £66.2m investment by Legal & General in 250 homes for families previously in temporary accommodation, on a 40-year lease to Croydon council, with rents at the Local Housing Allowance level. The investment was made on behalf of L&G Retirement Institutional in 2019 and 2020.
“I am confident that such an initiative could meet not only the social demands of the council but also the financial investment opportunities that would be in the interest of your pension fund,” she wrote.
The letter illustrates the financial difficulties many local councils find themselves in. A Local Government Association survey recently found almost one in five local councils say they are at risk of bankruptcy because of rising demand and cost pressures. In 2018, there had been a 49.1% real-terms reduction in government funding for local authorities and a 28.6% real-terms reduction in local authorities’ spending power between 2010-11 and 2017-18, according to the National Audit Office.
The letter has been sent to the following pension funds, according to her office:
The letter illustrates the financial difficulties many local councils find themselves in. A Local Government Association survey recently found almost one in five local councils say they are at risk of bankruptcy because of rising demand and cost pressures. In 2018, there had been a 49.1% real-terms reduction in government funding for local authorities and a 28.6% real-terms reduction in local authorities’ spending power between 2010-11 and 2017-18, according to the National Audit Office.
The letter has been sent to the following pension funds, according to her office:
- Universities Superannuation Scheme
- NatWest Group Pension Fund
- Electricity Supply Pension Scheme
- BT Pension Scheme
- Pension Protection Fund
- Railways Pension Scheme
- HSBC Bank (UK) Pension Scheme
- Strathclyde Pension Scheme
- Barclays Bank UK Retirement Fund
- Greater Manchester Pension Fund
Do pension funds receive more requests for investment from local MPs and councils?
