Wednesday, August 12, 2015

Overview & Scrunity "Call in" expenditure on Newham "Special Purpose Vehicle"

I was very pleased to hear this evening that members of Newham Council Overview & Scrutiny Committee had agreed to "call in" the Executive Mayor's decision to spend up to £500,000 on developing a  "Special Purpose Vehicle" (SPV) for the Newham Staff Pension fund.  This decision to spend the money was made without the agreement of the Investment & Accounts Committee.

I have raised concerns about this proposal here, "Professional Pensions" have questioned whether it is costing too much here and a "leading financial figure" described it as "bloody dangerous" here.

Many thanks to Cllr Nazeer for requesting the "Call in".

"Dear Members of Overview and Scrutiny.

I am writing to request that you support my application to "call in" the decision by the Executive at the Cabinet Meeting on Thursday 23rd July 2015 (item 5) to spend up to £500,000 of public money on setting up an “Alternative Asset backed Financing for the Newham Pension Fund”.

I believe that this is the wrong sequencing for this decision because the proposal has not been consulted upon and agreed beforehand with the Newham Council Investment & Accounts Committee. As a member of this committee I am concerned that this proposal may not be in the best interests of the Council nor the staff Pension fund and we might waste this £500,000 if the Committee decide that this proposal is not appropriate. I understand that the alternative asset proposal has significant risks attached to it which I feel merit proper scrutiny. 

It is inappropriate in principal for any such proposal to go ahead without the agreement of the Investment and Accounts committee beforehand.

I request that the Overview & Scrutiny(O&S) should examine the arguments and consider making a recommendation back to the Executive that no further expenditure of public funds is made until the Investment and Accounts committee have had a chance to fully consider the proposal and are made aware of all  the possible costs and benefits of the scheme".

Cllr Farah Nazeer. 
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