The launch of a single national investment vehicle for nearly 90 local authority funds in England and Wales is one of three cost-saving measures being examined by the UK government.

According to a tender launched by the Department for Communities and Local Government (DCLG) earlier this month, it is seeking to hire an actuarial or investment consultancy to offer a “robust analysis of the costs and benefits associated with structural reform” of the Local Government Pension Schemes (LGPS).

Noting the £500m (€590m) annually spent by the funds on asset management and administration, the department said the study would examine the benefits of a single investment vehicle for all LGPS in the region.

It will also look at two further options – launching several vehicles with “closely aligned” investment approaches, or the potential for merging the existing funds with each other.

It follows a recently concluded consultation on the future shape of the pillar in which DCLG made clear it was not “wedded” to the current number of funds – 89 in England and Wales.

In the tender notice, DCLG added: “Building on this initial call for evidence, the Cabinet Office and the Department for Communities and Local Government would like to commission further advice to explore the savings that might be realised by collaboration.

“The purpose of this research is to provide government with robust analysis of the costs and benefits associated with structural reform of the Local Government Pension Scheme, to develop a roadmap to implementation and to consider how that reform might be applied to other funded public service pension arrangements.”

The tender is now closed to applicants.

Welsh local authorities have previously considered pooling assets in a single investment vehicle, and a similar approach was also proposed by the Wandsworth Borough Council Pension Fund.

Several neighbouring local authorities in England have, meanwhile, considered merging their pension funds, although the proposal was made as part of an overall merger of the three councils.