Public pension pot ‘worth £6bn’

16 July 2012 Local government pension funds could raise £6bn for infrastructure investment – around a quarter of the government’s target – a report has claimed.
Research undertaken by the Association for Consultancy and Engineering (ACE) has found public sector pensions, if properly marshalled, could provide the sums for new investment in UK infrastructure, but that falls far short of the government’s plans to bring £20bn into the sector through pension funds.

The organisation warned that the government needs to make a greater effort to bring the different funds together through its Pension Investment Platform.

“Fragmentation into 99 regional funds means that no single fund has the capacity to invest in a significant infrastructure project or asset,” said ACE chief executive Nelson Ogunshakin. “Creating a platform through which all 99 can invest just 5% of their funds into projects would result in £6bn for infrastructure investment.”

The report warned that the Treasury’s review of PFI needs to take into account the needs of pension funds, so that opportunities can be better tailored to the sector.

It also said using pension funds should not be considered a panacea for the UK’s investment needs.

Referring to the government’s National Infrastructure Plan, the report concluded: “Given the scale of the investment required and the need for structural and cultural change, it is unlikely that they are going to increase investment at the scale required, in the short-term to solve our infrastructure crunch.”

This page was last updated on:
13 September 2014.

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