The government will set out a ‘new plan’ for the Local Government Pension Scheme to invest billions of pounds in “local projects” as part of plans to level up the country, Michael Gove has said.
The levelling up secretary highlighted the proposal in an article in the Mail on Sunday that previewed the long-awaited levelling up white paper, which is due to be published on Wednesday.
It comes five months after the prime minister and chancellor said they would not mandate institutional investors to make more illiquid investments in the UK.
In his article, Mr Gove wrote: “We’ll also ensure the money working people have invested on their behalf for their retirement helps create jobs in their communities, not rake-offs for the already rich. We will set out a new plan to get the £16bn of council pensions invested in local projects, not foreign corporations.”
Senior figures within the LGPS community told LGC they were unsure what the £16bn figure refers to, and the Department of Levelling Up, Communities & Housing has not responded to a request for clarification about this, or whether the new plan will place mandatory requirements on council pensions funds.
One director of pensions told LGC the government was unlikely to mandate anything at the moment after it lost a case at the Supreme Court in 2020 about its ban on council pension funds making investments that went again UK foreign or defence policy, and would require legislation to do this.
They said: “I’m sure they will focus on encouragement. It’s hard to see what form that might take. State aid was always an issue when we were in the EU – that should be less so since we have moved on from EU regulations.”
And while there could be scope for the LGPS to work in partnership with other public bodies in areas such as R&D spending and investment in housing, they noted that “it’s difficult when other bodies have a lower cost of capital”.
They added: “It feel it’s almost a philosophical decision rather than an investment decision – some funds are comfortable investing locally (and already do) other do not (and don’t). I’m not sure the government can do much to change that in the short term. Longer term, they may introduce some change but it will require legislation to do so.”
Mr Gove’s comments signal the latest attempt by ministers to use the LGPS, which had a market value of £337bn in England and Wales as of March 2021, to fund investment in the UK.
In 2015, then chancellor George Osborne launched plans to pool the assets of individual LGPS funds so that they could make bigger investments in UK infrastructure. This resulted in all funds in England and Wales joining one of eight LGPS pooling organisations that were eventually formed.
And last August, the prime minister and chancellor Rishi Sunak published a “challenge to the UK’s institutional investors” to invest more in UK assets.
In a joint letter, they said pensions funds from countries such as Australia and Canada “are benefitting from the opportunities that UK long term investments afford, while UK institutional investors are under-represented in owning UK assets”.
They added: “To seize this moment, we need an Investment Big Bang, to unlock the hundreds of billions of pounds sitting in UK institutional investors and use it to drive the UK’s recovery. It’s time we recognised the quality that other countries see in the UK, and back ourselves by investing more money into the companies and infrastructure that will drive growth and prosperity across our country.”
The letter said the government has a responsibility to “remove obstacles and costs to making long-term, illiquid investments in the UK”, and said it was “doing everything possible – short of mandating more investment in these areas as some have advocated – to encourage a change in mindset and behaviour among institutional investors, and we remain open to addressing further barriers where they are identified”.
LGPS funds and pools already invest in UK assets.
Examples include GLIL, which was formed by Greater Manchester Pension Fund and London Pensions Fund Authority in 2015 to invest in core infrastructure assets predominantly in the United Kingdom – which currently include investments in Anglian Water, Clyde Windfarm and Forth Ports, and the London Fund, set up by three LGPS organisations in 2020 “to help solve some of the housing and infrastructure problems facing the capital”.
Island's largest investment in affordable housing taking shape in Saanich | BC Gov News – BC Gov News
Ahmed Hussen, federal Minister of Housing and Diversity and Inclusion –
“Everyone deserves a safe place to call home. Our government remains committed to working with our partners to ensure our seniors have access to housing that meets their needs. Today’s announcement is another important step in the right direction and will go a long way to support families in Saanich. This is the National Housing Strategy at work.”
Parm Bains, Member of Parliament for Steveston–Richmond East –
“This investment from the National Housing Co-investment Fund is improving the economic and social well-being of the individuals, seniors and families who will soon call Nigel House their home and will make Saanich a better place to live. When people have a secure and stable home, they gain the confidence they need to succeed and fulfill their potential.”
Fred Haynes, mayor, District of Saanich –
“It’s amazing what can happen when multiple stakeholders, including our local community associations, take a collaborative and proactive approach to challenges like housing. This project caters to a wide range of housing needs in Saanich and I look forward to seeing how it will enhance our community over the years to come.”
Derrick Bernardo, president and CEO, Broadmead Care –
“Broadmead Care has had a dream for years to build a new Nigel House. We are excited to see housing, health and social services coming together to make this dream a reality and more. The new Nigel House will be part of a beautiful community campus of care with a focus on aging in place, research and innovation.”
Geoffrey Ewert, CEO, Garth Homer Society –
“The Nigel Valley Project is a remarkable collaborative effort with the goal of meeting the needs of our diverse community. What we are creating is more than just housing – we are creating an inclusive community where people from all walks of life feel a true sense of belonging and have a place that feels like home.”
Bruce Homer, board chair, Garth Homer Foundation –
“The Nigel Valley project amplifies what can be achieved when stakeholders collaborate for the good of the community as a whole. Garth Homer is proud to be a part of this transformative initiative.”
Virginia Holden, executive director, Greater Victoria Housing Society –
“Greater Victoria Housing Society is really thrilled that we can increase the amount of affordable rental homes available in Saanich. We are very grateful to be a part of this strong partnership with the Province and other community non-profit organizations that will result in a transformation of this neighbourhood, and create a community where everyone feels at home.”
Chris Forester, executive director, Island Community Mental Health (ICMH) –
“Providing housing and recovery-oriented supports to people living with mental health challenges is at the heart of our work. ICMH is proud to partner in bringing 800 homes and the creation of an inclusive community to the Nigel Valley to serve so many of those in need.”
Indigenous-led Winnipeg organizations' $620M investment plan proposes new hospital, housing – CBC.ca
A hospital for Indigenous people and hundreds of new housing units are among the spending priorities laid out in an investment plan released Wednesday by a coalition of Indigenous-led organizations in Winnipeg.
The Winnipeg Indigenous Executive Circle — a coalition of 32 member organizations that work to support Winnipeg’s Indigenous population — is proposing a 10-year, $620-million spending plan, which it believes will make Winnipeg a better, healthier place for its communities.
“It’s essentially just laying out … in dollar terms, where we need help and where we see funding gaps that we need to actually hit these objectives,” co-chair Kendall Joiner said at at the Neeginan Centre on Higgins Avenue, where the plan was unveiled on Wednesday.
Spending proposals are broken down into four priority areas: health and well-being, housing and homelessness prevention, supports for families, and employment and education.
One of the big-ticket items in the plan is a hospital specifically serving Indigenous people, estimated to cost $65 million.
The plan also calls for a commitment to build hundreds of new housing units, including supportive housing and units with rent geared to income, expected to cost at least $347 million.
Other priorities include $1 million for cultural programming through the Winnipeg Indigenous Friendship Centre and $1.2 million for the creation of Indigenous research institutes.
Leaders of the Winnipeg Indigenous Executive Circle — whose membership includes organizations like Ma Mawi Wi Chi Itata Centre, End Homelessness Winnipeg and the Eagle Urban Transition Centre — say the goals in the plan would promote and elevate the work Indigenous-led groups are already doing.
“We’re a community that’s always been told, ‘this is what you need to do to move forward,'” said Crystal Laborero, chief executive officer of the coalition group.
“I think we’re in a day and a time that we are now realizing that … we have a lot of leaders in the community that are looking to make change for the urban Indigenous community and we have the solutions. We’re the experts in our field, so we feel that we can do this.”
The coalition says the plan shows governments and donors exactly what it would take to make Winnipeg a more welcoming and safer place for people who are First Nations, Métis and Inuit.
Success will be measured not by dollar value, but by how willing governments are to come to the table as equals, and how willing they are to understand that the Indigenous-led groups that make up the coalition know exactly what their communities need, the Winnipeg Indigenous Executive Circle said.
Credit Suisse Nabs Truist's Wolfgram for Tech Investment Banking – BNN
(Bloomberg) — Credit Suisse Group AG hired Rick Wolfgram as a managing director within its technology investment-banking group.
Wolfgram, who’s based in San Francisco, will report to Brian Gudofsky, the Swiss lender’s global head of technology investment banking, according to a memo to staff seen by Bloomberg News. A spokesman confirmed the memo’s contents, declining to comment further.
Wolfgram was most recently a managing director at Truist Financial Corp., where he led internet and digital media investment banking. He’s worked on transactions including initial public offerings for Coursera Inc., DoubleVerify Holdings Inc., NerdWallet Inc., Udemy Inc. and Snap Inc., as well as a high-yield offering for Cars.com Inc., Gudofsky said in his memo. Wolfgram joined Truist in 2012 after working at ThinkEquity.
Earlier this month, David Miller, Credit Suisse’s global head of investment banking and capital markets, said the Zurich-based firm plans to hire roughly 40 managing directors as part of its broader effort to rebuild.
©2022 Bloomberg L.P.
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