Report reveals pension funds local investment

Stoke-on-Trent councillors have criticised Staffordshire’s £7.55 billion pension fund for investing ‘everywhere but Stoke-on-Trent’.

A new report shows that Staffordshire Pension Fund owns industrial estates in the Staffordshire Moorlands and South Staffordshire, and has investments in a Stafford leisure complex, affordable housing in Newcastle and Tamworth and the M6 Toll – but none in Stoke-on-Trent.

The pension fund has members across 544 different employers including local authorities and schools, with Stoke-on-Trent City Council contributing around 20 per cent of its assets. Members of the city council’s audit and standards committee had previously asked for further details around the fund’s local investments, raising concerns that Stoke-on-Trent was potentially missing out on millions of pounds.

A report to the committee, based on the response from the fund, explained that it had ‘a legal responsibility to act solely in the best interests of scheme members’. This means investing in order to generate sufficient returns to be able to pay benefits to workers when they retire.

The report states that while this does not rule out local investment, it can make it more challenging, due to investment opportunities being smaller and fewer in number, and the risk of conflict of interest.

Staffordshire Pension Fund does own two industrial estates in Staffordshire: Hadleigh Park in Blythe Bridge, and Vernon Park in South Staffordshire.

It has also invested in a number of other local assets, through large institutional fund vehicles. These include Fischer Farms Vertical Farm in Burton-on-Trent; Waterfront leisure complex in Stafford; the M6 Toll; and affordable housing in Newcastle, Stafford and Tamworth.

The pension fund is also working with eight partner funds in the Midlands ‘to determine how local investments can best form part of any future allocation’.

Audit committee members expressed disappointment at the lack of investment in Stoke-on-Trent. They voted to formally ask Councillor Alastair Watson, cabinet member for finance, raise the issue with the pension fund, which is administered by Staffordshire County Council.

Labour councillor Andy Platt said: “They’ve invested everywhere surrounding Stoke, but not Stoke. There’s Hadleigh Park in the Staffordshire Moorlands, affordable housing in Newcastle and Stafford – they’ve invested everywhere except Stoke-on-Trent – when Stoke-on-Trent provides so much of its income. It’s absolutely mad.

“We do need to go back to them. We accept all the things they have to do to invest, but other people do invest in Stoke-on-Trent. We see investment from outside bodies, even international investment, but not our own pension fund. This is shocking.”

Councillor Sarah Jane Colclough added: said: “The report says that decisions must be made without bias or favouritism. But you can question the bias if we miss out every single time.”

But Conservative councillor Ross Irving raised concerns over political intervention in the pension fund. He said: “We do need to be a little cautious here. I do have sympathy for Cllr Platt’s viewpoint, and it does seem a little unfair that the city is not as represented as we would like. But political intervention in pension fund investment is something we need to steer well clear of – its primary concerns are its pensioners. If we go down a route of political direction as to wheree people ought to be investing, we’re going down a very dangerous road in my view.”

Director of governance James Doble told the committee that he believed there was little chance that things would change prior to local government reorganisation.