Councils will now be permitted to invest twice as much of their pension assets in building more homes, energy schemes and high speed rail.
The Local Government Pension Scheme England and Wales is administered by 89 separate local funds that hold combined investment assets worth £150bn. Following consultation, the government decided that the current limit of 15% of their holdings was an unnecessary obstacle for authorities seeking to invest in infrastructure. This is being doubled to 30%.
New regulations have been introduced to relax the current investment regulations contained in the Local Government Pension Scheme (Management and Investment of Funds) Regulations 2009.
Local government minister Brandon Lewis said: “Unlocking town hall pension pots so they can invest more in vital infrastructure projects will help this country complete on a global scale and get Britain building. By lifting the restrictions controlling local pension investments councils will now have the choice to invest more in local job creating infrastructure and housing projects.”
A recent report by the Future Homes Commission said council pension funds could be used to build infrastructure without increasing the government deficit.
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