The chances of further mergers among the 89 Local Government Pension Scheme (LGPS) funds advanced a step further today, after ministers and the Local Government Association launched a consultation into ways of significantly reducing the £471m annual running costs.

First mooted in May at the National Association of Pension Funds local authority conference, the call for evidence, which closes 30 August, could lead to sweeping changes into how town hall funds are structured.

Ministers are determined to narrow the wide variation in costs per member – which range from £28 to more than £300 for LGPS members, and drive more co-operation between the schemes – including mergers.

Communities Secretary Eric Pickles has recently cited figures, showing City asset managers saw their earnings rise 9% to £347m in 2012/13 for running LGPS funds, while the value of investments held increased by a mere 4% to £158.6bn, as a reason for government intervention.

The consultation will also examine how the LGPS could be made more accountable through better and more transparent data on their operation – including the possibility of a single annual LGPS report to sit alongside individual reports to help track the performance of funds.