06 July 2026
LGR and the LGPS: What could devolution mean for the sector?
On 29 June, Andy Burnham MP outlined his vision for localism and devolution should he become the next Prime Minister. While he didn't discuss pensions directly, several aspects of his agenda could have important implications for the LGPS.
The core message was around localism, showing a strong support for Local Government Reorganisation (LGR) and devolution. Should Mr Burnham become Prime Minister, we can expect the current programme to continue and it may even see quicker progression.
When the Government first announced the English devolution programme back in 2024, it highlighted that it was inspired by the approaches taken by the Mayors of London and Greater Manchester. It comes as no surprise that Mr Burnham, the then Manchester Mayor, would be supportive of devolution.
The role of Mayors is crucial to the devolution programme. They will be responsible for driving local economic growth. They will need to work with LGPS pools to develop local projects which benefit residents and provide a projected return that will allow funds to meet their fiduciary duties, should they choose to invest. Again, this goes to the core of the approach Mr Burnham has said he wants to take.
We already know that house building is a key priority for Government. Now we have discussions about the largest social housing building plan since the end of World War II. If this can be achieved, it will drive a significant number of potentially investable local projects for LGPS funds.
Of course, pools will need to conduct detailed due diligence, and the shareholding funds will need to be satisfied this is being done correctly as part of the oversight of investment governance.
Another plank of Mr Burnham’s speech is reforming utilities. LGPS funds, and indeed all pension schemes, will watch any changes in this arena closely as the dividends from utility companies, such as water, are an important income source for the payment of benefits.
The subject was mentioned in much the same breath as local regeneration and reindustrialisation. There was discussion about the creation of new cross-UK partnership clusters, with the example of collaboration between business clusters in Cambridgeshire and Manchester. We’ve seen some success already, such as in the sphere of Life Sciences in Oxfordshire, so it wouldn’t be difficult to imagine there could be investable benefits of interest to funds.
On a less positive note, Mr Burnham hasn’t made clear his vision for the future of the LGPS. Whilst it may be seen to be a footnote of his main ambitions, we need to remember that there are around 7 million people who rely on the LGPS across the UK to provide retirement benefits.
The LGPS has a huge part to play, both in the lives of its members as a pension provider and in wider economic growth as an institutional investor. I doubt it would be controversial to suggest clarity on the role of, and future plans for, the LGPS would be appreciated across the sector.
If you would like to discuss further, please get in touch.
This blog is based upon our understanding of events as at the date of publication. It is a general summary of topical matters and should not be regarded as financial advice. It should not be considered a substitute for professional advice on specific circumstances and objectives. Where this blog refers to legal matters please note that Hymans Robertson LLP is not qualified to provide legal opinion and therefore you may wish to obtain independent legal advice to consider any relevant law and/or regulation. Please read our Terms of Use - Hymans Robertson.
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