The effort to force Wandsworth Council to divest its £3.3 billion pension fund of anything linked to Israel’s actions in Palestine has hit another stumbling block – and this time staff actions are hard to justify.
Wandsworth’s pensions committee promised six months ago to produce divestment recommendations for the fund following a campaign that began in August 2024 with a 2,500-signature petition.
The deadline expires at next Monday’s meeting – with no recommendations.
Instead, council staff are proposing a survey of its 44,000 pension fund members to ask their views. The move, which will undoubtedly be seen by campaigners as more foot dragging by the council, has a serious and significant flaw: it wrongly asserts a legal position and misquotes a minister’s letter in an attempt to steer the results away from ethical divestment.
What the committee committed to do
The committee voted unanimously in December 2025 to produce specific recommendations within six months for how to shift its funds away from companies like BAE Systems, Airbus, HSBC, and Barclays, who are seen to be benefiting from the situation in Gaza.
Previously staff had relied on a KC opinion that stated the pension fund had a fiduciary duty to consider the long-term impact of such a move; the implication being that an ethical divestment would negatively impact the fund.
In next week’s meeting papers however, a report from the council’s financial advisers, Mercer, concludes that none of the available exclusion options would significantly harm the fund’s long-term returns. The expected return over 20 years is the same whether or not the most restrictive option is applied.
That should have resulted in council staff recommending to the committee that it choose the most restrictive investment option available to the council through the new London-wide CIV pension scheme.
Instead, staff have proposed a survey of all 44,000 members and their views, with the committee asked to sign off on the plan and draft wording.
In a sign that the council may have tipped over from responsible management of the fund to active resistance to changes, however, it warns members in that survey that legal opinion – both from its KC opinion and from a letter from a government minister – is that they are limited in what changes they can propose. That assertion is wrong and appears to rely on cherry picked quotes that give a misleading, even false, view of what the true situation is.
What the survey gets wrong
The survey reproduces part of the KC opinion but does not provide full context or refer to the Mercer report. It then quotes a government minister’s letter to tell members that decisions on boycotts, divestment and sanctions are a matter for central government, not local councils. It attributes the quote to “the Secretary of State.”
The letter was not written by the Secretary of State. It was written by the Minister of State for Local Government and Homelessness, Alison McGovern – a subordinate role.
The survey does not provide proper context. The actual letter continues: “This does not prevent authorities from setting or changing investment strategies for other reasons, particularly where required to meet their fiduciary duties to scheme members.”
That is the same ground the council’s own KC opinion – the one officers have been using as justification for delay – said was permissible, now that the financial evidence is in place.
In other words, the KC opinion – which the council has yet to publish in full – and the minister’s letter, which is publicly available but has been selectively quoted by council staff, actually point to the opposite conclusion: that divestment is possible.
There is further context not included in the papers despite its direct relevance: the letter was not addressed to Wandsworth. It went to the chair of the national pension scheme oversight board, Cllr Roger Phillips. Three days after receiving it, Phillips said publicly he was “disappointed”: “The Minister’s reply does not fully address the key issue.” Phillips was not commenting on the politics of divestment. He was saying the letter had not answered the legal question his board was asking.
The question of divestment of funds away from certain companies as a result of actions some view as unethical is a complex and moving target. The pensions committee would have been better served by being provided with fair and objective advice that informed of the full complexities of the situation rather than being presented with an option that provides restrictive understanding and delays active consideration.
What comes next
The committee that meets on 8 June has a new chair following May’s elections. It should reject the survey proposal. The wording, as this story has set out, is misleading. The survey itself is unnecessary. Nothing prevents council staff from doing what the committee resolved six months ago: producing recommendations, including one to move the fund to the most restrictive ethical investment option available – something members have actively requested.
This is part of a worrying pattern at the pensions committee, which receives little public scrutiny and has repeatedly made decisions in private that are not clearly supported by the public evidence. The December 2025 motion was unanimous. The financial case for delay has now been answered by the council’s own advisers. The next step is straightforward.
As we reported in March, council leader Simon Hogg had already written privately to London CIV – the pooled investment vehicle that manages the fund – asking it to develop the most restrictive responsible investment option, without informing the committee.
Read it yourself
The full text of Minister McGovern’s letter is publicly available on the oversight board’s website. The statement from Cllr Roger Phillips, the chair of the board it was addressed to, is there too. Readers can judge for themselves whether the council’s use of the letter is accurate.
Attend or take part
The meeting on Monday 8 June is open to the public: Room 123, Wandsworth Town Hall, 7.15pm.
Current and former council and school workers in the borough are scheme members and will be eligible to complete the survey if the committee approves it on Monday. To contact the committee secretary: 020 8891 7156 or daniel.kuszel@richmondandwandsworth.gov.uk.
Third in Putney.news’s series on the Wandsworth pension fund. The second story is here; the first, from April 2025, is here.
