Councils paying hundreds of millions to City fund managers for staff pension funds

Councils are paying out hundreds of millions of pounds in fees to City fund managers to run gold plated pension funds for their staff, The Daily Telegraph can disclose.

 In all £347million was paid out by the council pension funds to investment managers last year, up nearly 9 per cent on the £319million paid out in 2011. 

The overall cost of the fees would be the equivalent of adding £15 to every council tax bill in England and Wales.

The increase is more than double the increase in the value of the council pension funds, which went up by nearly 4 per cent to £158.6billion, raising questions about whether the taxpayer is getting value for money.

For example fees paid by Lewisham jumped by 85 per cent to £3million and by 41 per cent to £8.7million in Durham.

A breakdown shows taxpayers in some of the country's poorest boroughs supporting payments to some of the City’s biggest fund managers. 

Camden paid out £2.8million fund managers including £1.1million to Aberdeen Asset Management and £667,000 to Fidelity while Barking and Dagenham paid £2.2million to fund managers including Aberdeen Asset Management, Goldman Sachs, Prudential and Schroders.

Somerset paid £2million to a group of fund managers including Jupiter Asset Management, Aviva Investors and JP Morgan.