Council drops motion on pension investment following “strong legal advice” from monitoring officer

Monitoring officer Chris Potter said the motion “unlawfully seeks to put pressure on fund managers to make investment decisions for, in effect, foreign policy reasons”.

The motion said the council should resolve "so far as the legal considerations allows" that: "The Isle of Wight Pension Fund Committee (IWPFC) should engage (in writing) with fund managers to strongly urge them to avoid any direct or indirect investment which may or may be seen to be supporting or enabling the continuing genocide in Gaza, the ongoing displacement of Palestinians in the region, or the blockading of aid to Palestinians."

It also said the IWPFC should write to the relevant national pension oversight bodies and the UK Government, urging them to support ethical investment standards across all Local Government Pension Scheme funds.

The council was set to vote on the motion last week, but it was removed from the agenda before the meeting following an email from the council's monitoring officer, Chris Potter.

Writing to the council's chair, Cllr Ian Dore, and its vice chair, Cllr Vanessa Churchman, the monitoring officer said: "My strong legal advice (and I can only give such advice, and not decide) is that the 'notice on motion' should not be put to the vote at Full Council."

He labelled the motion as "wholly inappropriate" for the following reasons:

1. It undermines the Pension Fund Committee decision to undertake a wider review - As the local authority has granted delegated authority to the Pension Fund Committee under its terms of reference, and the Pension Fund Committee has already formally agreed on 3 September 2025 to undertake a wider review, Full Council should respect the collective decision of the Pension Fund Committee made on behalf of the local authority to conduct such a review. It would be wrong to seek to revisit such decision of that Committee and prematurely prejudice that discharge of the local authority's functions made on behalf of the local authority; and

2. It moreover fundamentally departs from the statutory purposes for which statutory powers are granted – The statutory powers under which the Pension Fund Committee operates are only granted to deliver the statutory purposes for which such powers were enacted. The 'motion on notice' deliberately strays from such statutory purposes and unlawfully seeks to put pressure on fund managers to make investment decisions for, in effect, foreign policy reasons etc, and to automatically support 'ethical investment standards across all LGPS funds'. [NB. The words' so far as the legal considerations allow' do not save the 'motion on notice' as any local authority can only exercise powers granted to it for such statutory purposes, and it has no prerogative powers]. It also puts members at risk due to acting beyond their powers ('ultra vires') for which members cannot protect themselves under the 'good faith' provision.

Speaking at the meeting chairman, Cllr Ian Dore, said: “Myself and the vice chair received some legal advice on which we are acting and the motion will be removed from the agenda this evening under the powers of the chair.”

Cllr Dore took the decision under a provision in the council's procedure rules that allows the chair to reject any motion or notice which does not conform to the procedure rules. 

An Isle of Wight Council spokesperson said: "The motion on notice was rejected because the Pension Fund Committee had already resolved to conduct a wider review, and the wording of the motion on notice sought to stray into areas beyond the powers granted by Parliament and the statutory purpose for which powers had been given."

Adam Carey