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30.11.15

Scottish councils urged to maximise investment in local infrastructure

Local authorities in Scotland must maximise the opportunities presented through pension funds and City Deals to improve local infrastructure, the Scottish Parliament’s Local Government and Regeneration Committee has recommended. 

In its ‘Report on Pension Fund Investment in Infrastructure and City Deal Spend’, the Committee found that there is “untapped potential” for Pension Funds to support communities and generate income. 

The Committee noted that a lack of expertise and cautious approach to risk means too few pension funds are taking the opportunity to invest to deliver positive economic impacts. 

According to the Government‘s Actuary Department (GAD), less than 1% of UK LGPS’ funds are typically invested in the infrastructure investment category. 

The Committee’s report found that Local Government Pension Funds should invest more capital in local projects such as affordable housing, an approach that has been pursued by Manchester City Council. 

Committee convener, Kevin Stewart MSP, said: “It has been proven time and again that investment in infrastructure is needed to grow a successful economy. All communities across Scotland must have the chance to benefit from this success and the opportunity to grow. 

“Whilst there are some risks associated with investing in infrastructure, these can be reconciled given the long-term nature of these investments together with their positive social and economic impact. By working collaboratively Pension Funds could maximise their returns, share expertise and reduce investment costs. The returns should also be measured in terms of growth to communities.”   

The Committee also stated that City Deals offer “unique” opportunities to invest in infrastructure for local authorities. 

It also recommends that council areas included in a City Deal undertake sufficient awareness work to assist communities understand strategic infrastructure investment plans for its area and the anticipated benefits this will bring. 

Last week, as part of the Glasgow and Clyde Valley City Deal, it was reported by PSE’s sister title RTM that plans to build a rail link between Glasgow city centre and Glasgow Airport have been proposed with two options in the frame. 

The first is a scheme to build a tram-train link, costing £144.3m, which would provide a connection from the city to the airport via Paisley. The second is a £102m light rail link.

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