Agenda item

Consideration was given to the report of the Corporate Director, Resources which informed Members of a consultation by the Department for Communities and Local Government (CLG) (for copy see file of Minutes).

In discussing the report Councillor Morgan asked what the constraints were in terms of the current 15% limit on investment in partnerships. Daniel Banks, Pension Fund Adviser explained that the existing limit was considered to be too low, preventing local authority Pension Funds from pursuing infrastructure opportunities. This in effect limited diversification by constraining access to an asset class that may be well-suited to a local authority Pension Fund’s long term needs.

Councillor Jopling asked if investment in infrastructure by Durham Pension Fund would benefit County Durham. Daniel Banks advised that this would depend upon where it chose to invest. The overall aim of the proposals was to make more funds available to invest in infrastructure throughout the UK.

Philip Williams added that this was a complex issue and if the Fund wished to pursue investment in infrastructure Advisers would investigate closely on their behalf. In general terms it would be more attractive to invest in contracts already in place and delivering index linked returns.   

Don McLure, Corporate Director, Resources added that it was pleasing to note that the Government’s proposed changes to Private Finance Initiatives (PFIs), an approach sometimes used to procure construction projects, would now benefit the public sector. 

Resolved:

That the consultation be noted and the Corporate Director, Resources be granted delegated authority to respond to Communities and Local Government on behalf of the Pension Fund, as outlined in paragraphs 10 to 13 of the report.