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Two efficiency-promoting ideas are currently under discussion in the UK. One is to merge the pension fund investments of the London boroughs with the centralised Greater London funds for transportation and local government employees. It makes little intuitive sense to have more than 30 separate London borough funds.
How have these inefficiencies arisen? The answer is, of course, a combination of precedent and a system in which each local authority is responsible for its own finances. The current government's 'localism' policy is encouraging bottom-up efficiency saving ideas in local government – for example, through pooled services. Pooling London's funds fits intuitively within each idea, but prescriptive legislation may be needed to aid the passage of this sensible plan.
Also problematic is the idea of a London infrastructure fund, which has been tacked on to the pooling concept, some say to make it more palatable to central government. This comes with its own problems and is an entirely separate issue from that of creating a single fund.
The second idea, promoted by the National Association of Pension Funds, is to reduce charges for defined contribution pensions. In the UK, much occupational defined contribution pension business has developed out of wholesale-retail pensions through life insurers and is notorious for high fees.
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