Prof. John Clancy

*BREAKING* West Midlands Pension Fund finally admits to *£4.3Bn surplus* last 31/03/*2025* in just-published valuation. Birmingham surplus undeniably £1.1 billion a year ago. WMPF surplus now £6.1B as cld &shd have included £1.8B increase in assets since. Brum now at £1.7Bn. It should have used an investment return of at least 6.5% to value its liabilities (as other pension funds have), which would have meant a further £1.7 billion added to the surplus. And so the surplus would then actually be almost £8B, which would be £2.2B for Birmingham. Birmingham Chief Commissioner McArdle has simply let the WMPF do what it likes without challenge. Birmingham should be paying 0% employer contributions for the next three years because they've already prepaid them. That would add £142 million a year to its budget, And the rest of the surplus should come back through negative secondary contributions.

@UniteEconomy And the Commissioners need to get out of the way. They have intervened in this dispute, ‘instructing’ the council . See for example:

No! We need exactly the opposite to this. Commissioners are a problem @bhamcitycouncil NOT a solution. “In the name of God, go!” birminghammail.co.uk/news/midlands-…

@brumlabour still waiting for @uklabour to colonially appoint its leader amidst the Westminster PM psychodrama. Farcical that other parties having to wait around for talks on a rainbow coalition for @bhamcitycouncil because of @UKLabour’s micro mis-management of the local party.

New rainbow coalition @BhamCityCouncil shld stress to govt that we’ve had enough of commissioners. Big questions over their role in the bin dispute. They also failed to listen over the grotesque WMPF surplus & claw back money to the city. They are a problem not a solution.

And how does that work regarding possible rainbow coalition with Greens, Lib Dens & Indies to run @BhamCityCouncil? Birmingham is now hanging around waiting for central Labour Party to distract its attention from leadership struggles to colonially appoint a Brum labour leader.

Centrally appointing the local @brumlabour leader, with no chance of challenge, effectively ended up with the Labour group effectively collapsing last time round. @UKLabour have learned nothing it seems.

Apparently @brumlabour can’t appoint its Leader in Birmingham, because it has to await approval from Starmer or Steve Reed! The last centrally annointed leader hardly worked out well. Utter disregard for local members & elected councillors again. birminghammail.co.uk/news/midlands-…

How Birmingham City Council went ‘bankrupt’ being unnecessarily forced to pay hundreds of £millions into its pension fund to pay off a deficit which never existed. It was always in surplus. Labour didn’t listen. They’re not listening now. thisismoney.co.uk/money/markets/…

@exactlyaron x.com/johnclancy/sta…

@johnclancy "... West Midlands Pension Fund said it 'did not recognise the figures quoted' without elaborating ... " The surplus figure from their own accounts? What?

*BREAKING* As I predicted last month, Labour no longer has the votes to control the Pension Fund Committee at the West Midlands Pension Fund. The committee currently has 16 members: 10 from Wolverhampton, 1 from each of the other 6 mets. Proportionality rounding up would likely split Wolverhampton’s 10 members as: Labour 6, Reform 2, Tory 2. Labour can only count on 6 definite members. (All from Wolverhampton). Reform can count on 4 definites, with Sandwell and Walsall added to their definite 2 in Wolverhampton. So of Definite 12 votes it splits: 6 Labour; 6 Reform/Tory Of the 4 remaining NOC councils Labour can only possibly get 1 of them (Coventry). Tories highly likely to get 2 more from Solihull and Dudley. So Labour’s maximum is 7 out of 16. 8 votes will be Reform/Tory (4 votes each), and for the final vote, whether Birmingham sends a Green or a Reform member, Labour have lost it. Essentially Reform+Tories run it. Unless of course Tories do a deal with Labour!!🤣

IS LABOUR ABOUT TO LOSE CONTROL OF THE BIGGEST LOCAL GOVERNMENT PENSION FUND IN THE UK? CONTROL OF GREATER MANCHESTER'S £35 Billion PENSION FUND ON A KNIFE-EDGE! Labour's Tameside runs the GMPF, but last night Labour lost control of Tameside with 25 seats to Reform's 19 (they won all the seats up), Tories on 5, and independents on 6. It won Salford and Wigan overnight, but lost Stockport to LibDems and Bolton to NOC. Assuming round-up proportionality in Tameside, and that the pension fund committee remains at 21 members (it can be 23) Labour now has only 5 committee members from Tameside. Update: Oldham remains NOC Labour can only be certain this morning of 7 councillor members on the 21-member committee. To maintain the slimmest of majorities it would need to win 4 out of the 5 met councils yet to declare today. Rochdale is predicted to be lost by Labour to NOC. So they would have to retain control of Manchester, Bury, Oldham and Trafford to be certain of a slim 1-seat majority and retain control of the Greater Manchester Pension Fund. That is by no means certain. Many rivers to cross, and many deals to be done in the back rooms. This was not supposed to happen.

YOUR HANDY ELECTION NIGHT LGPS GUIDE! With big changes afoot in councils expected after today's election, we should also see big changes in England's local government pension funds, and who controls them. And the 100s of £Billions of assets they are in charge of. It's possible we will see changes of control at the biggest local government pension funds, because they are often administered by one council, whose fund committee members have a supermajority, so sudden change can happen fast. So the biggest fund administering councils to watch are: Tameside (Greater Manchester), Wolverhampton (West Midlands), Bradford (West Yorkshire), Barnsley (South Yorkshire), South Tyneside (Tyne and Wear). The administering council for the other big one, Merseyside, is unaffected as the Wirral is not going to the polls today. A change in control of a relatively minor council can supercharge a change of control at the big regional Pension Fund level. Even going into no overall control (NOC) can radically affect the overall make-up of a new pension fund committee. Looking at Election Watch UK's predictions today, they suggest that Labour will lose Tameside to NOC; that Labour will have a majority of only 1 in Wolverhampton with Reform second; Labour will lose Bradford to NOC with Greens the largest party; Barnsley will be won by Reform; and South Tyneside will be won by Reform. With the wrong results for Labour in the other Greater Manchester Mets, Labour will lose control of the GMPF. Similarly, the wrong result for Labour in the West Midlands could see Labour losing the WMPF, although with fewer other mets than in Greater Manchester, it will be a lot tighter and Labour could hang on. But with Reform predicted to be running Birmingham in a minority, but clear council gains in Walsall, Sandwell and Coventry, what ends up happening in Solihull and Dudley between Reform and the Tories could decide it. But as the Greens are likely to be the significant largest party in Bradford, the Greens will likely control West Yorkshire. Reform will run Barnsley and so the South Yorkshire Pension Fund; and Tyne &Wear Pension Fund will be handed to Reform as it is predicted to gain South Tyneside. As Reform are predicted to win Essex, then Labour might end up only controlling one of the top 10 biggest local government pension funds, by dint of no elections in the Wirral! Outside the top 10, Reform are predicted to gain Norfolk, Suffolk, Essex and the Isle of Wight. In London it is predicted to be carnage for Labour with 7 boroughs mostly going directly from Labour to Green (Lambeth, Lewisham, Hackney, Islington, Brent, Haringey, Waltham Forest). The Greens are predicted to be the NOC largest party in Newham, Greenwich, Southwark and Camden. Bexley and Havering are predicted to be Reform Gains. Labour will at least lose Hounslow, Wandsworth, Merton, Barnet and Enfield to NOC. Perhaps Labour’s nightmare in LGPSland will be averted, but fasten your seatbelts, it’s going to be a very bumpy LGPS ride!

@BrokenBarnet @dgbailey Without intervention by the pension fund ctee, nothing. Investment Banks get it all to play with &charge £3B a year to do so. A Ctee can vote to change surplus return policy in the ‘Funding Strategy Statement’ (which must be kept under continual review). So it’s a vote on a ctee.

@johnclancy @dgbailey Very good! So - what happens to the funds if they hang on to them?

*BREAKING**Exclusive* @dgbailey & I have published our breakdown of all the relevant stats from just-out 2025 rear-view mirror actuarial valuations of all of the England & Wales Local Government Pension Funds. public.flourish.studio/visualisation/… We don't think these valuations can be trusted from a public accounts probity perspective. It shows a postcode lottery in terms of outcomes for taxpayers. Bursting with contradictions &inconsistences everywhere you look; and total & utter chaos in methodology &judgements. In particular the valuation of liabilities is compromised pretty much everywhere, &should not be trusted. Despite a clear &obvious annualized investment return of over 7% for the last 10, 20 & 30yrs, well over half of the funds used 5.5% or less to value their liabilities. The higher this figure is, the lower the liabilities. And only one fund came up with an acceptable figure of 6.8%. It matters because the surplus in a LGPF is owned by the taxpayer as employer. Every one of these pension funds is in substantial surplus now, because these are figures are from a year ago. I'm afraid to say these valuations are pretty much worthless, cannot be trusted, will be subject to challenge after the elections, and won't last longer than a Liz Truss lettuce.

@BrokenBarnet @dgbailey The surpluses are massive now, and because most payments in from employers and employees will continue to cover almost all of the pensions and lump sums being paid out, the basic asset fund base will just get bigger and bigger, yes. So the Surplus will indeed accumulate.

@johnclancy @dgbailey Can you explain (in words of one syllable, for my benefit) what happens to the surplus funds? Do they accumulate, year on year?