By Professor John Clancy and Professor David Bailey
2nd April 2026

Royal Borough of Kensington and Chelsea holes local government establishment elite below the water line.

It voted to set the employer contributions to its pension fund at 0% until 2029.

There's no reason now why newly-formed pension fund committees in May, with fresh mandates, shouldn't simply vote to do the same, copy-paste RBKC advice and documents, reconsult - and recertify 0% contributions for all their employers, immediately.

On 9th March 2026 the Royal Borough of Kensington and Chelsea Pension Fund Tory-dominated Investment Committee met. It holed the Local Government Establishment below the water line; then blew it out of the water, for good measure.

It voted to set the employer contributions to its pension fund at 0% until 2029.

It was a local government earthquake. This was meant to be under control at DHCLG.

But what was as striking as the decision itself was the strength of the officer’s report to the councillors on their options.

It was a thorough, detailed, reasoned, well-argued, quantitative and qualitative rationale for the councillors to make the obvious 0% judgment they came to.

It is well worth reading. We would also advise every member of every UK local government pension fund committee to read it too.  And ask themselves why they, too, did not receive this advice.

And every council Section 151 officer should read it too, and ask themselves some awkward, serious questions.

The report by the Triborough officer, Phil Triggs, is clear that a 0% Employer contribution rate is both appropriate and advisable:

And then the correct, but still quite astonishing, advice came that whatever judgment they made on the range of choices open to them would actually have no impact on the health and wealth of the pension fund and its ability to pay all its promised pensions to every current pensioner and every current employee, which it could do so more than twice over.

The advice to Councillors on the mega-surplus was equally stark, and could easily apply to every other local government pension fund in the country:

Triggs’s report covers all the bases.

There is no respite to be had for the doom-mongers around the local government establishment relating to market turbulence due to war (with some very current advice) saying they should effectively disregard recent turbulence in the markets.

Anyone who has read these blogs over the last 18 months knows this is the case - but it is worth repeating.

The annualised growth return on Local Government Pension Fund assets has remained  7%+ over the last 10, 20 and 30 years.

7% or more through the 2008 crash, public sector rescue of the banks and markets, Quantitative Easing, ultra-low interest and bond rates, the Brexit referendum, Brexit, Covid, state intervention in the economy and markets due to Covid, the Ukraine War, its related Energy and fuel price crises, inflation spikes, Tory Government collapses, Venezuela, Iran war.

The medium to long-term position remained the same 7% or more, annualised.

Even the most recent data from the scheme's own statutory Scheme Advisory Board (SAB) called this out clearly last year:

That’s all pension fund committee members should ever have needed to be told about their investments.

The nonsense figures of the last 15 years, which have created these mega surpluses and megahikes in employer contributions, were built on short-term, shifting sand.

There’s also bad news in the also-published RBKC funding strategy statement for those people who think it is ALWAYS a primary objective of the fund to keep contributions as stable as possible:

All-in-all, this is a comprehensive demolition of the entire basis upon which the local Government pension scheme in the UK has been run for the last 15 years.

The inexplicable failure of politically- and economically-naïve actuaries to grasp this then fed into what turned out to be fatally flawed and fundamentally faulty, unnecessarily-complex modeling by the ‘Big 4’ actuary companies. And so was their advice as fatally flawed.

It resulted in these funds being misadvised. They were told that their investments would barely get an annualised 4.5% return for good.

The bombshell report should probably stand as the epitaph on the gravestones of the current local government Whitehall elite.

It should probably also do so for the permanent secretary of DHCLG, if not also the Local Government cabinet minister himself, Steve Reed MP.

For a reckoning is coming.

The real danger for the Local Government Whitehall mandarin elite is that while their dodgy status quo line has, to a greater or lesser extent, been held pretty much everywhere else, post-May it will be obliterated. They probably don’t know what’s going to hit them yet.

After the May 7th 2026 elections the dam will break.

There will come vast swathes of new councillors on politically radically-different pension fund committees.

The most recent authoritative research of the current state of opinion polling from Stephen Fisher at elections etc projects a net council seat gain for Reform of +2,260, and +450 for the Greens. 

They could quite appropriately choose simply to cut and paste RBKC’s officer advice into their own agenda reports immediately. Then duplicate the RBKC Funding Strategy Statements and investment strategy documents with appropriate name changes.

This would inevitably, too, lead to recertification of their own employers’ contributions to 0% with immediate effect til 2029.

Any attempts by desperately panicked mandarins to persuade the Labour government to intervene to prevent this would likely meet the same judicial review fate for Steve Reed as the cancelled local elections debacle.

And it wouldn’t be a good look.

Indeed, it would be the grotesque chaos of a Labour local government minister (a LABOUR local government minister) scuttling around in taxis stopping councillors releasing funding to their own workers.

And their borough’s non-council state workers for that matter in schools, academies, FE colleges, unis, and the police and fire services.

Every Section 151 officer in the country should read this report and ask themselves whether they have not failed their local council tax payers. Those tax payers they had been specifically created to protect. Failed them by not intervening in budgets this year, and previously, to declare them to be unlawful, and refusing to sign them off.

The relationships between the local government establishment elite and the investment banking sector was strong. They both thought they’d done enough to ensure £0.5 trillion assets in the so-called ‘Local Government’ Pension Scheme were safe in their hands. 'So-called' because the vast majority of workers in the LGPS are now non-council state employees.

And with mega-surpluses hoarded with them too, safely away from return to those who legally owned them: councils across the UK ,and the thousands of other state employers.

The sheer size of the funds’ surpluses meant they were able to top-slice (now) £3 billion a year in management expenses – almost entirely in investment management fees.

We assert that this was deliberate policy capture of DHCLG  by the Investment Banking sector. It led to lower spending on public services for the last 15 years, yes, but actually mainly lower spending in all state schools, FE colleges, universities, and the police and fire services to the benefit of bankers.

UK taxpayer assets were effectively privatised, transferred from the public sector and rented out for private good to the Investment Banking sector.

A sector which had a too-chummy relationship with DHCLG: and indeed had more hidden chummy relationships across the country with the 100-odd local cadres of local government establishment elites at council level and inside the LGPS.

DHCLG Mandarins were its chief enablers, mainly out of stupidity; if not, it's far more serious.

This entire edifice came tumbling down on the 9th of March 2026 because the entire edifice was based on being able to control what they thought to be clueless,  gormless, financially-illiterate local councillors, and their council officers who were supine to their Whitehall masters and mistresses. They could be manipulated and they were manipulated.

That ship has sailed.

When the dust settles after the May local elections, there’ll be new sheriffs in town across the UK.

Trying to suggest the 2025 valuation decisions were set in stone at 31st March 2026 simply won’t wash.

That sinking ship has also sailed - deep down into the ocean.

Picture credit for Marston St used as background with titles overlaid in video, Steve Cadman cc-by-sa-2.0 https://www.flickr.com/photos/98115025@N00/2255416987