09 October 2026
3 min
England’s Local Government Reorganisation (LGR) has been put on hold, giving some welcome breathing space to funds that are currently implementing Fit for the Future reforms. However, LGR remains in the news with a slant towards the north of the UK.
The Scottish Government has announced plans to progress their promised public service reforms, with mention of changes to the number of NHS Scotland health boards and a restructure of the current unitary council set-up. Unfortunately, there is no mention of what it means for the LGPS. What’s going on?
As part of wider reforms involving the future of care provision in Scotland, attention has turned to the structure of local politics. Scotland has long had a unitary system in place.
The existing 32 Scottish unitary councils are being considered for replacement with 6-10 regional authorities (to provide strategic services) and community authorities responsible for decision making at a local level, of which there will be between 120-160. For context, each community authority is likely to cover a population of around 40,000 people.
Currently, there are 11 Scottish funds, but they aren’t divided up on the ‘one fund per area’ basis prevalent in England and Wales. But it’s clear the proposed community authorities will be far too small to be an administering authority.
With fewer regions than existing LGPS funds, mergers might be on the cards. If the Scottish Government settles on 10 regions, that’s still a reduction by one. There has yet to be any mention of LGPS pensions in any publications, a trend we saw with LGR in England and Wales.
One of the big questions Officers and Pension Committees south of the border had to consider was what governance structure works best for them? Do they prefer to have a unitary authority as the administering authority or are they better served by a Single Purpose Pensions Authority (SPPA)? The latter provides the fund with more autonomy and a growing number of funds going through LGR are considering this structure change, whilst considering the associated additional resource spend. Our recent interview with Gary Delderfield at Burges Salmon on the subject is worth a listen.
Quite frankly, yes.
There are distinct advantages to both structural models and no ‘one size fits all’ best practice approach. Scale is important to determining if a SPPA is likely to be a success or whether a stronger connection to a regional authority will provide the safe harbour of services the fund needs.
In the event there are mergers, SPPAs offer a path towards the optics of a collaboration rather than a takeover but carry extra expense that needs to be accounted for from a value for money perspective.
As an aside, and in a bid to avoid any confusion, there is another type of SPPA that will be already well known amongst Scottish funds i.e. the Scottish Public Pensions Agency!
We’ll be keeping a close eye on developments. In the meantime, we’d invite Scottish funds to make the most of our vast experience of LGR to get ahead of the curve and frame their initial thoughts.
Do get in touch, we'd love to hear from you.
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.
We pride ourselves on being thought leaders and are constantly discussing the many issues facing and shaping our industry. Sign up to find our current thinking on topical issues.
Opens in new window Subscribe
