Tower Hamlets is gearing up to meet the government's mandate for local investment, with plans to develop a comprehensive investment ambition framework for its pension fund by March 2026.
The Tower Hamlets Pension Committee discussed the government's response to the 'LGPS: Fit for the Future' consultation at a meeting on Monday, 21 July 2025. The consultation outlines reforms to the Local Government Pension Scheme (LGPS).
One of the key reforms is the local investment requirements. Funds are expected to publish a local investment ambition by 31 March 2026, aligning with regional economic growth and regeneration goals. While there is no minimum allocation, the government expects alignment with regional economic growth and regeneration goals. These local investments, facilitated through the London Fund, may include opportunities in residential property and affordable housing, community regeneration, digital infrastructure, and clean energy.
According to the meeting minutes, The Fund will need to develop a strategy for identifying and assessing local investment opportunities in collaboration with London CIV... A review of capacity, legal risk, and fiduciary responsibilities will be necessary.
Strategic asset allocation decision-making will remain with Partner Funds.
However, the move towards local investment isn't without potential challenges. The report pack from the meeting noted recent risk movements in the risk register. Specifically, the risk of London CIV and investment managers underperforming (HRP0021) was elevated from ORANGE to RED due to a misalignment between Pool and Fund-specific investment goals.
The report pack included a recommendation that the Pensions Committee support the development of a local investment ambition framework by March 2026.
The full agenda and reports pack from the meeting are available on the Tower Hamlets Council website.
