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 23^rd 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.