New Stable
Work in progress
New Stable
Expanding and reforming the role of the Local Government Pension Scheme (LGPS) in driving forward housing investment in the new parliament.
Solving the housing crisis, a stated but unrealised goal of successive recent governments, is both a generational challenge for policy and a hugely significant potential vehicle for investment in place. That a crisis exists is well-rehearsed, but its hydra-like, multifaceted nature must be stressed. The housing crisis is principally one of supply, with not enough homes being built in general year-on-year. Beyond this, however, is the crisis over the type of homes being supplied – with far too few genuinely affordable and social homes being built, meaning that an uptick in supply itself will not without further intervention alleviate the problem. There are also the myriad effects of the crisis and the vicious cycle they create: the pressure on services such as temporary accommodation caused by homelessness, the enormous and unequally distributed downwards pressure on disposable income caused by escalating housing costs.
It is for all these reasons and more that the new government have placed the delivery of homes at a scale not seen in decades at the centre of their agenda for this Parliament, with the Local Government Pension Scheme (LGPS) cited by the chancellor as a key means to achieve investment. A major question for policy going forward in this context is how best to facilitate targeted investment in meeting housing demands from the LGPS into appropriate vehicles which – while acknowledging their fiduciary responsibilities – can alleviate the myriad pressures on councils through boosting housing growth across the country, with the ultimate end goal of unlocking wider economic growth missions and raising social prosperity in place.
If well managed, in the correct regulatory and legal environment, fulfilling the government’s housing ambitions could serve as a blueprint for LGPS sourced investment at the local level, with government capital and private finance coalescing around investments with multidimensional socio-economic returns. New Stable is a research project examining how the LGPS can best be used in innovative and imaginative ways to support increased investment in affordable housing and associated infrastructure, whilst retaining fiduciary integrity.
Key research questions include:
- How can state investment in housing be used as a catalyst for LGPS investment?
- What role should local government pension fund assets ideally play in in accelerating housing delivery?
- How can councils collaborate with their pension funds to drive targeted housing growth?
- What alterations are needed to the regulatory framework for investment to encourage housing delivery from pension funds?
- How can pension fund assets be used for housing delivery in a way which does not impact on the fiduciary duty of fund managers?
- What level of state funding is required to ‘crowd in’ private investment in housebuilding programmes?
- How can we properly measure the full ROI on investing in new housing delivery?
- With regards to ‘stable contribution’ what would an alternative view look like in which it could be seen what rates provide long-term sustainability with a measure of prudence?
Project in association with:
