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Local Government Pension Schemes team up on new procurement framework for Stewardship (ESG) services

New framework for agreement with a range of suppliers via a competitive process.

A successful collaboration between Local Government Pension Scheme (LGPS) Funds is setting its sights on Stewardship (ESG) services with the launch of a new procurement framework.

Part of the National LGPS Frameworks initiative, the new framework will put in place an agreement with a range of suppliers via a competitive process. This will enable buyers to place orders for services without running lengthy full tendering exercises.

This allows all LGPS Funds in the UK quicker and more efficient access to high-quality Stewardship (ESG) services, helping the LGPS to leverage its combined buying power while supporting local decision making and service requirements.

The framework will be split into lots to include voting, engagement and research. Frameworks are usually valid for a period of four years; however it may be agreed that contracts let using the framework can continue beyond this.

The funds are inviting Stewardship / ESG Service providers to attend a Concept Viability Day on October 7 in London, where they can receive further information on the proposals and will have the opportunity to help shape the framework.

The National LGPS Framework for Stewardship (ESG) Services is a collaboration between the Environment Agency Pension Fund, Lancashire County Pension Fund in partnership with the LPFA, Lincolnshire County Council, London Borough of Hackney, Lothian Pension Fund, Merseyside Pension Fund, Norfolk Pension Fund, Nottinghamshire County Council Pension Fund, Suffolk County Council, West Midlands Pension Fund and West Yorkshire Pension Fund.

The Chair of the Local Authority Pension Fund Forum (LAPFF), Kieran Quinn, welcomed the initiative as another example of LGPS Funds cooperating onstewardship issues to enhance the value of their investments while managing costs, which would benefit LAPFF when it next tenders for its research and engagement partner.

Existing National LGPS Frameworks include Actuarial and Benefit Consultancy Services, Investment Consultancy Services, Global Custody Services and Legal Services.

With savings of over £16m (€21.6m) so far, the frameworks are already proving their worth in terms of procurement efficiency and buying power.

“It’s really encouraging that so many funds are benefitting from this collaboration,” said Nicola Mark, Chair of the National LGPS Framework group. “With over a third of funds signed up to use the frameworks, they are rapidly becoming ‘the norm’ for procurement across the LGPS.”

The National LGPS Frameworks are in line with the government’s agenda for delivering greater value for money.

As part of their ‘LGPS Opportunities for Collaboration, Cost Savings and Efficiencies’ consultation, the Department of Communities and Local Government (DCLG) recognised that “there are clear advantages and savings to making use of the National LGPS Frameworks” and stated that “Funds should give serious consideration to making greater use of these frameworks.”

Any providers interested in attending the Concept Viability Day can book a place by registering on Norfolk County Council’s procurement system here. Places will be limited to two people per organisation.

Full instructions for registration and use of the system can be found here.