Patrick Tooher wrote a month ago this article
Burnham urged to tap up £150bn council pension surplus to boost local economies
The £550 billion Local Government Pension Scheme (LGPS) for England and Wales is awash with cash, meaning it has more than enough money to pay the pensions of its seven million members now and in the future.
They and their employers, who include local councils and thousands of sponsoring firms, paid in more than £13 billion into the scheme in the 2024-25 financial year, the latest figures show.
It is estimated that nearly £1 in every £4 of council tax goes into the coffers of the LGPS. There are two views of the LGPS’ surplus, both of which I respect.
Here is Ros Altmann speaking before Andy Burnham became Prime Minister. She is backed up by John Clancy who has featured on this blog before, focussing on the squalid state of Birmingham when its section of the Local Government Pension Scheme was overfunded.
Ros Altmann, who served as Pensions Minister in the Conservative government under David Cameron, wants these contributions to be paused and the money used instead to improve local services such as social care, libraries, further education colleges or bin collections.
‘It’s a scandal,’ she told The Financial Mail on Sunday. ‘Local authorities can’t fill potholes but they are paying huge sums into pension funds that don’t need the money. I find it staggering that more councils aren’t saying this is bonkers.’
Her views are echoed by former Birmingham city council leader and public pensions expert John Clancy.
He highlights the case of the Greater Manchester Pension Fund (GMPF), the largest in the LGPS with assets of £33 billion, which is run by close Labour Party allies of Burnham, pictured inset, on Tameside council.
The GMPF has amassed a near-£11billion surplus, according to a draft set of accounts for 2025-26 seen by The Financial Mail on Sunday.
Ultimately this surplus ‘belongs to the taxpayer’, said Clancy, who reckons the region’s 2.3 million adults are ‘owed’ almost £5,000 each.
Iain Clacher’s view of caution
Iain and Con Keating have contributed to this blog for many years and coined the term “ephemeral” as a word of caution for those who want today the money in what seem surpluses. Here is Iain urging caution. Pension payment ‘holidays’ are controversial and the legal status of surpluses is unclear.
‘It is an easy win to try and unlock these surpluses at a time when interest rates are high and schemes are well funded,’ said Professor Iain Clacher of Leeds University Business School.
‘But it needs very careful consideration and a full understanding of the costs, benefits and risks of doing so,’ he added
My contribution to this debate.
I’m not quite sure why this blog went viral but I’m told it has got over 100,000 reads. It calls on Andy Burnham to take a radical position on pensions and social care.
You can decide whether the stripping of LGPS surpluses is the radical position he could adopt.
The blog that seems to have caught on can be read here.
