London council to spend £100m from gold-plated pensions on homelessness
A London council is facing criticism over plans to use its gold-plated pension scheme to fund accommodation for homeless people.
The Royal Borough of Kensington and Chelsea will invest £100m from its pension fund to buy 250 homes in an effort to save taxpayer money.
It comes amid mounting scrutiny of councils' gold-plated pensions after The Telegraph revealed some authorities were spending more than half of taxpayers' money on staff schemes.
But experts questioned whether it was appropriate for Kensington and Chelsea to use its pension fund to 'indulge political objectives'.
Neil Record, a former Bank of England economist, said: 'Local Government Pension Funds benefit from a de facto government guarantee which allows local councils to indulge their political objectives at the expense of prudent investment management. This is a particularly egregious example.'
The Conservative-led council's pension scheme is worth £2bn, twice the amount needed to fully meet obligations to its members, meaning it is in rude health financially.
The vast savings pot has become a target for councillors seeking to raise money for more spending without significantly increasing council tax bills.
In February it was announced payments into Kensington and Chelsea's defined benefit scheme would be halted temporarily to save £9m earmarked for survivors of the 2017 Grenfell Tower fire.
This went against the advice of the fund's actuaries who said it would be 'inappropriate' to lower contributions before next spring but agreed the move would 'not have a detrimental effect' on the council's ability to pay out pension benefits.
Michael Hayles, of law firm Burges Salmon, said: 'The Kensington and Chelsea fund has a well-publicised strong funding level.
'However, as things stand, this investment will still need to stand up as an appropriate investment, with appropriate returns, bearing in mind the fiduciary duties of the pension fund when making investment decisions, notwithstanding the funding surplus.'
There is no blanket legal guarantee that would compel the Government to meet the costs of all funds within the LGPS or make good their deficits. More than a quarter of schemes within the LGPS were in deficit in 2022, according to an official review published last year.
Cllr Emma Will, who oversees property at the town hall, said more local authorities could follow Kensington and Chelsea's example, as many struggle to fund the costs of meeting their statutory obligations.
She added: 'We are fortunate to have an extremely well-managed pension fund, it's been the best performing for 30 years [and] it's very over-funded, which is terrific.'
Ms Will said that the unusual move was 'completely above board' and should not be discredited simply because 'it hasn't been done before'.
She said that investing £100m was 'very low risk' because the council plans to pay its pension fund for use of the new properties with government grants it receives to tackle homelessness.
'It is innovative and we are quite excited. If we get this right it's like the holy grail. We believe it does work, and it's nil cost to the council and it's low risk and win-win for everyone.'
Last year bills in Kensington and Chelsea for the average Band D property were £1,569.46 a year, up from £1,508.98 the previous year.
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Los Angeles Times
an hour ago
- Los Angeles Times
At Supreme Court, steady wins for conservative states and Trump's claims of executive power
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The justices gave states more authority to prohibit medical treatments for transgender teens, to deny Medicaid funds to Planned Parenthood clinics and to enforce age-verification laws for online porn sites. Each came with the familiar 6-3 split, with the Republican appointees siding with the GOP-led states, while the Democratic appointees dissented. These rulings, while significant, were something short of nationwide landmark decisions — celebrated victories for the Republican half of the nation but having no direct or immediate effect on Democratic-led states. California lawmakers are not likely to pass measures to restrict gender-affirming care or to prohibit women on Medicaid from obtaining birth control, pregnancy testing or medical screenings at a Planned Parenthood clinic. The new decisions echoed the Dobbs ruling three years ago that struck down Roe vs. Wade and the constitutional right to abortion. As the conservative justices noted, the decision in Dobbs vs. Jackson Women's Health did not outlaw abortion nationwide. However, it did allow conservative states to do so. Since then, 17 Republican-led states in the South and Midwest have adopted new laws to prohibit most or all abortions. On this front, the court's decisions reflect a 'federalism,' or states-rights style of conservatism, that was dominant in decades past under President Reagan and two of the court's conservative leaders, Chief Justice William Rehnquist and Justice Sandra Day O'Connor. Both were Arizona Republicans (and in O'Connor's case, a former state legislator) who came to the court with that view that Washington holds too much power and wields too much control over states and local governments. With the nation sharply divided along partisan lines, today's conservative court could be praised or defended for freeing states to make different choices on the 'culture wars.' The other big winner so far this year has been Trump and his broad claims of executive power. Since returning to the White House in January, Trump has asserted he has total authority to run federal agencies, cut their spending and fire most of their employees, all without the approval of Congress, which created and funded the agencies. He has also claimed the authority to impose tariffs of any amount on any country and also change his mind a few days later. He has dispatched National Guard troops and Marines to Los Angeles against the wishes of the governor and the mayor. He has asserted he can punish universities and law firms. He has claimed he can revise by executive order the 14th Amendment and its birthright citizenship clause. So far, the Supreme Court has not ruled squarely on Trump's broad assertions of power. But the justices have granted a series of emergency appeals from Trump's lawyers and set aside lower court orders that blocked his initiatives from taking effect. 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In both areas, the Roberts court ruled that the Biden administration had exceeded its authority under the laws passed by Congress. Away from Washington, the most significant decision from this term may be Friday's ruling empowering parents. The six justices on the right ruled parents have a right to remove their children from certain public school classes that offend their religious beliefs. They objected to new storybooks and lessons for young children with LGBTQ+ themes. In recent years, the court, led by Roberts, has championed the 'free exercise' of religion that is protected by the 1st Amendment. In a series of decisions, the court has exempted Catholic schools and charities from laws or regulations on, for example, providing contraceptives to employees. Friday's ruling in a Maryland case extended that religious liberty right into the schools and ruled for Muslim and Catholic parents who objected to new LGBTQ+-themed storybooks. 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USA Today
5 hours ago
- USA Today
Medicaid cuts, no taxes on tips and overtime: What's in the Trump-backed Senate megabill?
Big changes are ahead for Americans if the Trump-backed bill becomes law. Republicans are trying to pass it by a self-imposed July 4 deadline. WASHINGTON − High-income earners, waiters and waitresses could soon see greater tax breaks locked in under a bill backed by President Donald Trump that's on track for votes this weekend in the Republican-led Senate. People who rely on Medicaid access and funds for federal food aid would come out on the short end of the stick under the plan, too. There's plenty more that could affect the lives of everyday Americans inside the Senate's latest 940-page version of the Trump-backed megabill that emerged near midnight and which Republicans are scrambling to turn into law ahead of a self-imposed July 4 deadline. It's still unclear if the GOP will have enough votes when the debate begins around 2 p.m. EDT on June 28 on the president's biggest second-term priority for the Republican-led Congress. Supporters are emphasizing the chief engine of the Senate's proposal - extending Trump's 2017 tax cuts - and significant boosts to military and border security spending. They are also proceeding despite needing to remove sections of their bill that didn't meet the Senate's unique rules that would have repealed student loan relief and environmental regulations, restricting federal judges' powers and the Trump administration's efforts to bulk up immigration enforcement. More: Could Trump fail on tax bill? Why going 'big' doesn't always work out as planned "If you like higher taxes, open borders, a weak military and unchecked government spending, this bill is your nightmare," Sen. Lindsey Graham, R-South Carolina, chairman of the Budget Committee, said in a statement. Graham's team did have to make several adjustments in recent days. Certain Medicaid-related proposals were also left on the Senate cutting room floor. 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The 2017 law made other big changes to tax policy that will remain in place under the Senate bill, including doubling the child tax credit from $1,000 to $2,000 and nearly doubling the standard deduction. Other provisions in the 2017 tax law that affect both individuals and businesses will remain. 'This bill prevents an over-$4 trillion tax hike and makes the successful 2017 Trump tax cuts permanent, enabling families and businesses to save and plan for the future,' Sen. Mike Crapo, R-Idaho, said in unveiling the bill language. No taxes on tips, overtime Addressing one of Trump's most high-profile 2024 campaign promises, tipped employees like waiters and hairstylists would be able to claim a new tax deduction for tips through 2028, as could workers who are paid overtime wages. More: Americans are tired of tipping. Experts say no tax on tips could make things worse. The Senate kept this measure from the House version of the bill, but added on a $25,000 per year cap for the deduction and weakened the tax break for individuals whose income is above $150,000 or married couples making more than $300,000 combined. $5 trillion debt limit increase The Senate version looks to raise the nation's debt limit by $5 trillion, which is expected to aggravate fiscal hawks who were already concerned about the House bill, which projections say would raise that limit by $4 trillion. Including the language in this overall bill would give the federal government the OK to pay for programs that Congress has already authorized. Billions for U.S. military and 'Golden Dome' defense One area Republicans didn't spare an expense is defense spending, which some MAGA allies had suggested was "too much" in the lead up to the legislation's unveiling. 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Billions for the border, deportations The Senate held onto the massive increase in funding for the Department of Homeland Security, increasing the department's budget by roughly $150 billion – which would more than double its current funding. The bill authorizes $45 billion for new immigration detention centers. Under the DHS umbrella, U.S. Immigration and Customs Enforcement already operates more than 160 detention centers around the country. Many are full, as the Trump administration ramps up arrests of immigrants. Another $27 billion would go to fund the administration's mass deportation campaign, including to pay for 10,000 more deportation agents. ICE currently has about 6,000 deportation agents. At that funding level, the current administration "will be poised to dramatically expand community arrests and expand cooperation with state and local law enforcement agencies," according to an analysis by the American Immigration Council, which advocates for immigrant rights. The Trump administration's border czar, Tom Homan, said without additional money, "it's going to be a hard road" to achieve the president's goal of deporting 1 million immigrants this year. "We have a lot of people to look for, a lot of people to arrest, a lot of national security threats we know are in this country," Homan said during a White House press conference June 26. "We need to find them. We need more money to do that. We need more agents to do that."
USA Today
7 hours ago
- USA Today
Tens of thousands march against Hungary's government, for LGBT rights
Crowds in Budapest waved rainbow flags and carried signs mocking Prime Minister Viktor Orban amid a new ban on Pride marches. BUDAPEST, June 28 (Reuters) - Tens of thousands of protesters marched through Hungary's capital on June 28 as a banned LGBTQ+ rights rally swelled into a mass demonstration against the government. Crowds filled a square near Budapest's city hall before setting off across the city, some waving rainbow flags, others carrying signs mocking Prime Minister Viktor Orban. "This is about much more, not just about homosexuality, .... This is the last moment to stand up for our rights," Eszter Rein Bodi, one of the marchers, said. More: They were out and their companies were proud. Then came the DEI backlash. "None of us are free until everyone is free," one sign read. Small groups of far-right counter-protesters attempted to disrupt the parade, but police kept them away and diverted the route of the march to avoid any clashes. Orban's nationalist government has gradually curtailed the rights of the LGBTQ+ community in the past decade, and its lawmakers passed a law in March that allows for the ban of Pride marches, citing the need to protect children. Opponents see the move as part of a wider crackdown on democratic freedoms ahead of a national election next year when Orban will face a strong opposition challenger. Organizers said participants arrived from 30 different countries, including 70 members of the European Parliament. More than 30 embassies have expressed support for the march and European Commission President Ursula von der Leyen called on Hungarian authorities to let the parade go ahead. Seventy Hungarian civil society groups, including the Hungarian Civil Liberties Union, Transparency International Hungary and the Hungarian Helsinki Commission, published an open letter on June 27 in support of the march, saying the law that led to the police ban "serves to intimidate the entire society". 'Legal consequences' "The right to assembly is a basic human right, and I don't think it should be banned. Just because someone does not like the reason why you go to the street, or they do not agree with it, you still have the right to do so," Krisztina Aranyi, another marcher, said. Budapest mayor Gergely Karacsony tried to circumvent the law by organising the march as a municipal event, which he said does not need a permit. Police however banned the event, arguing that it fell under the scope of the child protection law. Orban, whose government promotes a Christian-conservative agenda, provided some clues on June 27 about what participants can expect when he warned of "legal consequences" for organising and attending the march. Earlier this week Justice Minister Bence Tuzson warned in a letter sent to some foreign embassies in Budapest that organizing a prohibited event is punishable by one year in jail, while attending counts as a misdemeanour. The law that allows for the ban of Pride lets police impose fines and use facial recognition cameras to identify people who attend. When asked about the threat of a one-year jail term, Karacsony said at a press briefing on June 27 that such a sentence would only boost his popularity. "But I cannot take it seriously," he said. Making the march a key topic of political discourse has allowed the Orban government to take the initiative back from the opposition and mobilise its voter base, said Zoltan Novak, an analyst at the Centre for Fair Political Analysis think tank. "In the past 15 years, Fidesz decided what topics dominated the political world," he said, noting that this has become more difficult as Orban's party has faced an increasing challenge from centre-right opposition leader Peter Magyar's Tisza party, which has a 15-point lead over Orban's Fidesz in a recent poll. Tisza, which has been avoiding taking a strong position on gay rights issues, did not specify in response to Reuters questions whether it believed the Pride march was lawful, but said those attending deserved the state's protection. "Peter Magyar has called on the Hungarian authorities and police to protect the Hungarian people this Saturday, and on other days as well, even if it means standing up against the arbitrariness of power," its press office said. Magyar himself would not attend.
