Baroness Scott of Bybrook (Con)

My Lords, I declare my interest as a vice-president of the Local Government Association and of the National Association of Local Councils. I support my noble friend’s Amendment 20. I do not intend to relitigate the arguments that have already been so clearly set out, but I wish to underline how pressing this issue becomes in the context of local government reorganisation. Local government reorganisation introduces a level of structural uncertainty that pension schemes are simply not designed to absorb without flexibility. In particular, the costs facing pension schemes will not be ring-fenced during the LGR. In those circumstances, it is not inevitable that administrating authorities will respond with increased prudence. If so, does that not risk higher contribution rates being locked in? This would not be because of deteriorating fundamentals, but because of the uncertainty created by this Government. There is also a timing problem. We do not yet know when the LGR will take place. It may well fall outside the actuarial valuation window, which would make access to interim contribution reviews not merely helpful but essential. Without them, schemes and employers can be left operating on assumptions that no longer reflect the reality of the structures beneath them. I would also be grateful if the Minister would clarify the position on valuation cycles. In 2025, we did not set contribution rates for a three-year period. We face the very real prospect that some councils, whose rates are now being set, may not even exist by the time the next triennial valuation takes place. This leads me to funding strategy statements. In the Minister’s view, have councils been given sufficient guidance from the Government to prepare these statements appropriately in the context of the LGR? These documents underpin long-term funding assumptions, yet many authorities are being asked to draft them without clarity on their future form or boundaries. Finally and critically, the treatment of assets and liabilities following reorganisation must be handled with absolute care. Ensuring that these are carved up fairly and accurately post-LGR is vital to maintaining confidence in the system. That process must be demonstratively independent, transparent and robust, not left to negotiation under pressure. Amendment 20 seeks not to obstruct reform but to ensure that, during a period of structural upheaval, pension schemes are not forced into unnecessary rigidity, excessive prudence or long-term misallocation of risk. For these reasons, I strongly support the principle behind the amendment.