Date: Mon 25 March
Innovative pensions fund plan for new social housing in Scotland
UNISON today launched a proposal to use Scottish council pension
funds to invest in much needed affordable social housing.
Preliminary discussions with housing associations have shown
keen interest in the plan which could potentially unlock many
millions of pounds for building new homes.
UNISON’s head of bargaining and campaigns Dave Watson will
set out the innovative proposal at the Scottish Federation of
Housing Association (SFHA) Development and Investment Conference
in Crieff today. (Monday)
He said that at a time of tight public
finances, with £11
billion of Scottish Local Government Pension Fund (LGPS) assets
currently invested overseas, it makes sense to switch investment
to socially useful projects like housing.
Dave added: “Scotland is crying out for new social homes.
Shelter Scotland estimates we need 10,000 every year but last
year only 4,295 were completed.
“The housing crisis is also set to get worse with welfare
reform changes, including the bedroom tax, direct payment of
housing benefit and other cuts affecting our most vulnerable
“The LGPS currently invests a massive 45% of its £24
billion funds in overseas equities.
“We believe that scheme members, many of whom are UNISON members,
want to see money invested ethically and to benefit local communities.
“Pension funds invest in arms and tobacco companies. We are
sure public sector workers would much prefer their money being
used to build new homes. Many of our members find it difficult
to access housing in the current property market.”
UNISON Scotland is involved in discussions about developing
one or two initial projects to test the idea with one or more
local authority pension funds.
Dave said: “Housing associations have always represented
a very low risk to lenders. Public finances are under pressure.
Commercial borrowing is difficult.
“We believe that this is stable, long term investment
with a very low risk of failure. If we have success with initial
projects it could potentially lead to many millions of pounds
for housing at a time when it is desperately needed.”
Notes for editors:
1. UNISON is Scotland’s largest trade union representing
160,000 members working mainly in the public sector in Scotland
and represents a range of staff delivering important services
2. The proposal is online at http://www.unison-scotland.org.uk/housing/FundingAndBuildingTheHomesScotland
3. The Future Homes Commission argued last year that Britain
needs a revolution in the scale, quality and funding of home
building, recommending a kick-start from an independent Local
Housing Development Fund, financed and owned by local authority
4. Richard Murphy, of Tax Research, said: “At a time
when conventional pension fund investment policy is simply
guaranteed to lose people money in the UK because of inept
management, market corruption and excessive charges why aren’t
pension funds being invested in things that we really need,
like housing, where the payback over a period of, say, 25 years
is exactly the sort of return a pension fund needs?" http://www.taxresearch.org.uk/Blog/2012/11/02/the-time-for-pension-funds-to-invest-directly-in-regeneration-and-housing-has-arrived/