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Presidents Blog

21 October 2016

Publish date: 21/10/2016

I am looking forward to meeting up with many friends and colleagues at the Governance Conference next month. It is particularly pleasing that LLG continue to place governance at the heart of its agenda. With the current push for service transformation leading to the creation of a plethora of new structures and new relationships to help fulfil statutory responsibilities and develop infrastructure, it is crucial that effective governance in these new arrangements ensures that democratic accountability is maintained as well as ensuring value for money. Ultimately, the authority is responsible to fulfil its statutory responsibility and to safeguard the public purse. This is true for every form of delivery whether it be contractual outsourcing, joint venture, trading company or agency arrangement. Interestingly, the imperative of good governance is now a key priority in every sector not just the public sector. Any corporate body which cares for its reputation will have its governance arrangements clearly set out and regularly reviewed. Local government has as ever been in the vanguard of all that is good and positive about enhancing governance and has proved its flexibility in responding to the challenges of new situations.

No service can escape this challenge. For many years our pensions services teams have gone quietly and purposefully about their business, pursuing prudent investment strategies designed to protect Fund members and to maximise the return. Eric Pickles thought it would be a good idea to merge all funds into one with some supreme central body to administer it. Now that would be a nightmare of governance. The previous Chancellor, George Osborne, then saw the potential of LGPS to fund his infrastructure aspirations by grouping pension funds into pools as Wealth Funds which would be used to invest in new infrastructure. Despite the implausibility of that aspiration, given the duty of funds to provide for its members, the agenda for pooling funds to secure efficiencies in administration costs and better investment returns is still being pursued. All pension funds are now going through the process of creating new joint arrangements, joint committees and in some cases investment companies which also engage the regulatory regime of the Financial Conduct Authority. Not content with guidance, the Government has included in the new regulations on pension investment tough powers to direct administering authorities on joint working including reserve powers to take control of pension fund management. Does this not remind you of certain other regimes we have encountered in the past and fly in the face of local accountability?

The current debate about the role of Parliament in triggering Article 50 suggests that many people still believe that democratic accountability is important, though a cynical view might be that it is simply another case of its members believing in their own importance. Local authority lawyers are crucial to establishing and maintaining good governance. Not for nothing did Professor John Stewart once describe them as the "geographers of policy space". See you at Conference.

Denis Cooper


Eversheds LLP