Local government pension funds have issued 'hands-off warnings to public bodies, desperate to use retirement cash to prop up stalled PFI projects, The MJ has discovered. Senior sources this week revealed several large funds within the ￡100bn Local Government Pension Scheme (LGPS) had rebuffed approaches from councils hoping to encourage schemes to invest in privately-financed school-building projects. Partnership for Schools, the government body responsible for the ￡55bn schools programme, has asked councils for emergency investment into PFI schemes because private funds have dried up. At least two large, northern-based LGPS funds dismissed the idea immediately, because they feared a conflict of interest between councillors' duties. Councillors on a town hall pension committee have a fiduciary duty to local taxpayers for their decisions, while pension funds have a duty to represent their scheme members. LGPS funds feared councillors would be unable to show decisions to approve PFI investments adequately balanced these interests.
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