There was a very interesting piece about the Pensions Infrastructure Platform in the FT the other day. This was originally seen as the Government's great wheeze to try and tap up pension funds to invest in infrastructure projects.
It's fair to say that the labour movement views this kind of initiative with a mixture of interest and trepidation. On the positive side, there may be opportunities for pension funds to invest in greenfield projects that both deliver decent financial returns and societal benefits. If this was tied up with commitments to good jobs on such projects this would clearly be a desirable outcome.
On the downside, unions have a number of questions/fears. Would such investments really deliver financially, and thus be in scheme members' interests? Is this a better option than the state borrowing at low cost to fund such projects (and potentially create good public sector jobs)? Will the money actually go into new projects, or will funds end up mainly invested in the secondary market for existing projects, including PFI deals?
Well, the experience of the PIP so far seems to bear out a lot of those concerns. In particular it is only picking up existing PFI contracts in the secondary market. As the FT article makes clear, this is a very long way away from the original vision and you have to question what the point actually is, since that kind of investment is already available (lower fees are part of the answer I guess). All in all it seems to confirm some of the more negative views.