UK - Islington Council is planning to sell its commercial property portfolio to help cover a £100m shortfall in its £367m final salary pension scheme.
The council must complete the transactions before March 2004 – the deadline for councils which have sought government permission to deposit capital receipts into their pension funds.
Councils are normally only allowed to deposit council tax revenue into the scheme, but rules have been relaxed to help councils cut the losses they have suffered on their pension scheme investments.
Council leader Steve Hitchens said: “We are facing dire financial problems with our pension fund, that has the effect of tying up money that could be spent on front line services.”
He added: “We’ve been given the opportunity by the government to plug the enormous hole in our staff pension fund and at this stage we are investigating whether this will be good value for money.”
The Liberal Democrat-run council has drawn up a list of 50 commercial properties for sale – properties that are largely used by charitable and community organisations.
Bids for the properties have already been received and a report will be considered by the council executive on January 16.
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