Viscount Younger of Leckie (Con)

My Lords, in speaking to Motion B1, I welcome that the Government have committed to a review of Regulation 64A of the Local Government Pension Scheme Regulations 2013. That is an important and necessary step, and their further commitments today are most welcome. However, if the GAD review is to be meaningful, it must first focus on the factors that directly drive employer contribution rates. In particular, it should examine the effectiveness of consultation between fund actuaries, administering authorities and scheme employers. Secondly, the GAD review must examine outliers in valuations. There is increasing evidence that some funds are applying discount rates that are significantly more prudent than those implied by gilt yields or insurer pricing, despite the Local Government Pension Scheme being an open, funded and asset-backed scheme. Thirdly, Section 151 officers are rightly expected to scrutinise expenditure rigorously, including pension contributions, just as they would any other area of spending. When budgets are tight and local taxpayers are under strain, those responsible must be able to understand the methodologies being used, weigh the trade-offs and, where necessary, challenge the conclusions reached by fund actuaries. It was with these concerns in mind that amendments were tabled in Committee, as the Minister is aware. Where such issues arise of the kind that I have outlined there is currently little recourse. Employers may be forced to wait up to three years for the next valuation cycle before any action can be taken. That is a considerable period to carry contribution rates that may be excessive or difficult to justify. The principle in our amendment is simple: the review identifies the problem and the interim review under Regulation 64A provides the remedy. On these points, I am glad that the Government have broadly recognised the concerns I have raised in my amendment. I shall listen to the remainder of the debate on this group, but I am more reassured now that this is a priority for the Government and that they are aware of the concerns that we have been outlining. I thank the Minister for his movement on this.