A PENSIONS fund in Worcestershire is expected to be merged into a huge regional investment kitty, it has emerged.

Worcestershire County Council wants to finalise a deal with seven other top-tier authorities under a new jointly-owned company.

The agreement includes Derbyshire, Leicestershire, Nottinghamshire, Shropshire, Staffordshire, Wolverhampton and Cheshire, under a move aimed at making bigger investments on the markets.

County Hall's fund is already worth around £1.5 billion and has 21,000 people paying into it every month - accepting employees from the NHS, police, fire service, other councils, schools, colleges and a raft of outside bodies.

But the tie-in will see a new 'investment pool' created with a staggering £35 billion of assets.

The suggestion was first mooted in 2015, but a proposal taken longer than expected to emerge due to it needing approval from Government ministers.

But the size of the fund has smashed through a Whitehall ruling that stipulates assets of at least £25 billion are needed to get such deals off the ground.

All of the authorities, including County Hall, will become joint shareholders of the pool and be tasked with overseeing decisions on it.

The Worcester News can reveal how the set-up costs alone are estimated to be £4 million, with Worcestershire's taxpayers forking out around £500,000 of the bill.

But an in-house report estimates the combined savings to be "in the region of £182 million" by 2032 - around £29 million a year.

The deal is expected to launch from April 2018, with Worcestershire a member of the pool as long as work can be finalised to establish a worthwhile return for this county.

Efforts are ongoing to work up the costs, so the county gets a firm share of the estimated savings.

A deal is set to signed by April or May this year, with the principle of the agreement already having the blessing of councillors.

Councillor Bob Banks, who chairs County Hall's pensions committee, said: "I hope we can finalise an agreement which will allow us to reduce our costs."

In recent years Worcestershire's fund has come under criticism for having large investments in tobacco firms - despite the county council having a statutory responsibility for public health.