The government has amended the rules to allow local government pension schemes to invest more of their assets in infrastructure schemes such as house-building, energy schemes and high speed rail.
From 1 April 2013, up to 30 per cent of a fund’s total assets can go into partnership vehicles – twice the current level. Funds will not be allowed to invest more than 5 per cent of their total assets in a single partnership, to spread the risk.
Investment decisions remain the responsibility of individual local pension funds, which have a duty to protect the local council taxpayers and their members.
Last October the Royal Institute of British Architects’ Future Homes Commission recommended that local government pension schemes should establish a £10bn fund to invest in new rental and shared ownership housing.