Question to the Ministry of Housing, Communities and Local Government:

To ask the Secretary of State for Housing, Communities and Local Government, pursuant to the Answer of 18 December 2024 to Question 18952 on Local Government Pension Scheme, what assessment she has made of the potential risk (a) to investment returns from the proposed changes to the nature and types of investments and (b) of political interference in investment decisions.

The Government remains committed to fiduciary duty remaining with local pension funds, who are responsible for ensuring that assets are invested in the best interests of employers and scheme members. Fiduciary duty is key to limiting political interference in investment decisions. Under the Government’s proposals Local Government Pension Scheme administering authorities will retain the responsibility for setting an investment strategy for their fund, including high-level objectives on the required levels of risk and return, which is the key driver of investment returns.

The Government published analysis in the Pension fund investment and the UK economy research paper, which illustrated that greater scale is able to generate greater economies and efficiencies, and to reduce investment risks.