Reform UK’s Zia Yusuf has launched a scathing attack on council pension fund investments in environmental projects, alleging they have severely underperformed and squandered billions in taxpayer money.
During a GB News appearance, Mr Yusuf revealed the party had uncovered evidence of substantial losses linked to green fund investments.
“We’ve just shown another example of billions of pounds of taxpayer money lost as a result of this crazy, religious obsession of net zero,” he declared.
The Reform UK official claimed these environmental investments had failed to meet reasonable performance benchmarks whilst fund managers collected substantial fees despite poor results.
Zia Yusuf spoke on GB News about the net zero ‘obsession’
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GB NEWS
He characterised the arrangement as “pay for non-performance” and suggested the true cost of net zero policies was being understated rather than exaggerated.
Reform UK’s analysis suggests council pension schemes have fallen short of targets by approximately £1.24 billion annually since 2020, according to party calculations examining 13 pension schemes under their influence.
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The party estimates that combining excessive fees with poor performance has resulted in £1.5 billion in yearly losses across these councils alone.
When projected nationally, Reform UK calculates the total cost to taxpayers could reach £10 billion annually through what deputy leader Richard Tice characterised as “incompetence”.
The Local Government Pension Scheme manages assets for nearly seven million members, with holdings expected to reach £1 trillion by 2040.
Reform UK’s investigation claims to have exposed systematic financial waste driven by investment strategies that prioritise environmental objectives over financial returns.
Mr Yusuf expanded on his criticism during the GB News interview, stating: “We’re talking about billions in the councils but if you scale it up, we’re talking about tens of billions. We were told we wouldn’t find anything but we are proving that wrong already.”
He emphasised that environmental investments had become a primary focus of these pension funds, resulting in significant financial losses.
Ed Miliband is spearheading the Government’s net zero drive
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PA
“You’re seeing a lot of money going into these green projects,” Mr Yusuf explained, arguing that the emphasis on net zero targets had overshadowed prudent financial management.
The Reform UK official maintained that their investigation contradicted claims they were exaggerating net zero costs. “We’re told we’re overstating the cost of net zero, we’re actually understating it,” he insisted.
Reform UK has proposed sweeping changes to council pension management, with deputy leader Richard Tice announcing plans to dismiss underperforming fund managers and eliminate environmental, social and governance objectives from investment strategies.
The party claims these reforms could reduce council tax bills by up to £350 annually per household or provide additional funding for social care services.
Zia Yusuf joined Jacob Rees-Mogg on GB News
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GB NEWS
Mr Tice accused investment managers of creating a “gravy train culture” marked by excessive fees and poor investment decisions.
“A gravy train culture has developed where everyone can overcharge, no one is held to account for underperformance, and the taxpayer is taken for a ride,” Mr Tice told The Telegraph. “Reform is calling an end to this financial mismanagement and abuse.”
The proposals include establishing simpler investment approaches focused on profitability and local projects such as social housing developments.
Pension industry representatives have strongly disputed Reform UK’s claims, with Pensions UK policy director Zoe Alexander highlighting the scheme’s 8.9 per cent aggregate return in 2024 and funding levels of 108 per cent.
Ms Alexander noted that government consolidation policies had already generated over £1 billion in savings, with further reductions expected as pooling reforms progress.
She emphasised that the LGPS remains a leading responsible investor with the highest proportion of domestic assets in the UK pensions sector.
Union leaders have also voiced opposition, with Unison general secretary Christina McAnea warning that “forcing council staff onto inferior pensions would leave retired workers worse off and add to the already severe recruitment crisis in local Government.”
A Ministry of Housing, Communities and Local Government spokesperson stated: “We do not recognise these claims about the Local Government Pension Scheme, and are absolutely committed to making sure it provides value for money and helps drive economic growth across the UK.”
