A COUNCIL with a £187m deficit in its pension fund has been urged to reconsider its investments in fossil fuel firms amid concerns it is putting thousands of people’s retirements at risk.

Darlington Borough Council’s Green Party group’s call follows research which found UK local authority pension funds had lost at least £1.8bn in value due to exposure to nine oil and gas companies.

A recent report by environmental organisation Platform and analysis firm Transition Economics found the value of direct investments in these energy companies by 56 pension funds had dropped from £3.6 billion in spring 2017.

A recent audit of Darlington council highlighted a £187m deficit in its pension liabilities, equivalent to almost two years’ funding for the council. Alongside numerous other organisations that have chosen to participate in it, Darlington council is a member of Durham County Council’s Pension Fund.

Green Party activists said the Durham Pension Fund features some £35m of investments in fossil fuel firms. The pension fund’s investment strategy states the largest risk it has is in relation to its equity holdings, and if equity market conditions deteriorate significantly this would have a negative impact on the funding level.

The strategy states: “The pension fund holds equities in order to provide the necessary returns to ensure that the pension fund remains affordable. The pension fund is a long-term investor but does require ncome over and above contributions received in order to pay pensions.”

While there is a consensus that local authorities have a responsibility to ensure their funds deliver the best possible returns for their employees, Unison’s guide to local government pensions and other research has shown pension funds that have divested from fossil fuels have financially outperformed those which remained invested in fossil fuels.

Green Party leader on the council Councillor Matthew Snedker said pension funds had lost hundreds of millions of pounds five years ago when coal prices dropped and last year saw huge pension fund losses when oil prices plummeted.

He said: “Many councils in the North East have declared a climate emergency but these declarations are meaningless if, at the same time, they are using public money to support the burning of fossil fuels. It’s now clear that as well as being a bad bet for the planet, investing in oil and gas is a bad bet for public sector pensions.

“There’s a pattern forming here and it’s only a matter of time before gas also falls through the floor. There’s a significant risk to pension funds that they could lose another chunk of money and push their pension funds further into deficit.

“Until now pension funds have said you’ve got to invest in oil and gas because they deliver a return. While it’s morally questionable if you invest in something that’s going to damage the future of the people who are going to retire the financial case is also flawed now.”

The authority’s leader, Councillor Heather Scott, said the council was examining the issues raised by the Green Party.