SNP welcome progress on Falkirk pension fund investment in social housing
Thursday, 23 September 2010 14:27
The Investment Committee at Falkirk Council, which safeguards the £1 billion Falkirk Council Pension Fund, has backed a call by Grangemouth SNP Councillor Angus MacDonald to investigate investment in badly needed social housing as an income stream for the pension fund.
At a Special Full Council meeting held in June Councillor MacDonald called on the Council to look at investment by the Falkirk Council Pension Fund into social housing. Councillor MacDonald argued that such an investment, while providing much needed housing would also provide the Falkirk Council Pension Fund with a guaranteed, index linked investment.
The Investment Committee had previously decided to invest 3% of its ‘Alternative’ section of the Strategic Asset Allocation fund in infrastructure projects, and Councillor MacDonald argued that social housing would be an ideal vehicle for capital investment
Members of the Investment Committee, of which Councillor MacDonald is a member, discussed the proposal in detail at its most recent meeting held on Thursday. Members were informed by officers and advisers that the Pension Fund does have the capacity to invest in social housing within Forth Valley.
Council finance officers have now been instructed to “further explore suitable market funds and the potential to incorporate a specific Forth Valley social housing project”. Informal talks have already taken place with local registered social landlords however the initiative is still at a very early stage.
The Scottish Government is also actively investigating ways in which pension funds can be used to accelerate the building of social housing throughout Scotland.
Welcoming progress, Councillor MacDonald said:
“I am extremely pleased that my initiative is being progressed by our finance officers. We badly need more social housing in Falkirk district, and indeed the wider Forth Valley. This initiative ticks all the boxes, allowing construction of social housing and the resultant construction jobs it would bring, while providing the Falkirk Pension Fund with a guaranteed index-linked investment. Affordable housing is a low risk, ethical investment so in effect, everyone’s happy!”
“While the SNP Government has provided grants to Falkirk Council to allow the construction of 130 flats in the district, there are around 8,000 applicants on the Council’s housing waiting list, so 20 new flats per year are not going to make up for the properties sold under the ‘Right to Buy’ legislation. This initiative would allow social landlords to construct properties when they are currently finding difficulty in securing funding from traditional sources such as our banks.
“I look forward to further reports coming to the Investment and Housing & Social Care Committees in the near future, once officers have explored the proposal and options in more detail."
The SNP’s Housing spokesperson, Councillor Cecil Meiklejohn also gave her backing to the initiative, saying:
“I very much welcome this initiative and also the Scottish Government’s recent statement on the use of local government pension trusts to invest in social housing. Local authorities across Scotland are under considerable pressure to meet the Government target for homelessness by 2012 and this initiative will go a long way to helping registered social landlords provide modern properties for rent.
“The accelerated funding from the Scottish Government has allowed Falkirk to start to meet the considerable housing demand however that is likely to now come to an end thanks to the new Tory Liberal Government. With a significant cut expected in the Scottish block grant received from London it is essential that we find alternative ways to help fund social housing to enable building programmes to continue.
“Housing Associations have a major role in delivering social housing and this is an ideal way of supporting our housing partners to deliver good quality homes.