Warwickshire councillors have delivered a sceptical view on plans to reform local government pensions amid concerns over political interference.

The county council is being consulted on proposals that would affect local authorities in England and Wales, potentially leading to more pooling of pension pots that they manage in a bid to improve outcomes and increase investment to boost the wider economy. 

Data published on the government's website suggests around £392 billion is invested on behalf of 6.7 million members of local government pension schemes. Plans to enhance the benefits include bigger, more centralised pots with investment decisions influenced by a collective rather than individual councils or authorities, plus a commitment to authorities considering "local" investment for the funds.

Councillors on Warwickshire's staff and pensions committee were underwhelmed. 

Cllr Bill Gifford said: "The idea that someone should give strong advice as to how the money should be invested for political reasons rather than what is best for the members of the pension fund is something that certainly concerns me.

"What is local? In this area, the major employer if you knock on the doors of Leamington is Jaguar Land Rover, which is owned by Tata which is an Indian company and the government would consider that a local investment. 

"I do slightly wonder whether the government is trying to push a political agenda rather than what is best for the members of the fund."

Cllr Chris Kettle wished to "challenge the wording" of the county's report which paraphrased the government's wish to "boost returns for savers".

"The Warwickshire Pension Fund is almost at record surplus at the moment because of the very high and consistent returns it has received on the back of very professional advice from fund managers over here and based overseas," he said. 

"Every opportunity is taken if the right opportunities exist to support those entities. It is not the pension fund's duty to invest in the local economy unless that is for the benefit of pensioners." 

Warwickshire County Council is due to formally respond to the consultation in January 2025 but listed a number of considerations in papers presented to councillors on the pension fund investment sub-committee this week. 

They included being able to gather appropriate advice on investments, in part "to manage conflicts of interest", and the need for "greater clarity" on local investment.

The report added: "We believe that the objectives of the pension fund, which are fundamentally to pay pensions now and in the future, must remain the sole focus of the fund. Local investing should only be considered where it is an appropriate element of the investment strategy and fundamental purpose of the fund.

"We favour a broad definition of 'local' investment, covering the whole of the UK to avoid the concentration risks of very local investment. 

"There are also issues requiring careful management around how mayors and combined authorities may seek to influence investment decisions, to ensure pension pools only make 'good investments' from a fiduciary perspective."