Inflation is down and stock markets are in decline - perhaps free fall would a better description.

These are difficult days for pension providers, some of whom are unable to honour the near promises they made to their customers.

Family Assurance's head office is in West Street, Brighton, and, as a friendly society, it is not in the pensions business but it does offer savers a remarkable range of products.

The society has more than 500,00 members paying an average of £25 a month. It is efficient and caring society and needs to be with so many individual customers.

Last week, I went to see chief executive John Reeve. He told me, during the last year, the average unit price of the society's funds had fallen by 11 per cent but there had been an improvement in the ratio administrative expenses.

"What about your annual meeting, what did your members think about the loss of value in their funds?" I asked. Mr Reeve said: "Clearly some were disappointed but most of our members are mature people who recognise that prices rise and fall; they take a long view and invest out of income."

Family Assurance is one of the city's largest employers and well known for its social programme. Mr Reeve encourages staff to become involved in community affairs.

Company staff assist at Brighton Middle School during their lunch hours and help the community in many other ways.

On my last visit to the company, Mr Reeve and his staff were planning major initiative to help the city. They were looking to create a Brighton and Hove City Mutual project. The fund was to be set up by Family Assurance with the object of investing in local sites and property developments. The fund would provide investors with a return, without the risks of stock market speculation.

Urban deprivation is a problem and the prospect of new funds received a warm welcome from the city council, New Deal, The South-East England Development Agency, the Brighton Regeneration Partnership and others. Sadly, as often happens, the lawyers got in the way and advised the council it could not, by law, endorse such an enterprise. In our modern society, the heavy hand of bureaucracy can crush initiative.

Mr Reeve said: "Obviously, it's frustrating for everyone and will need a fundamental rethink to see if we can come up with a viable alternative."

It is all very disappointing but what can the council do? Public funds are involved. Perhaps our new chief executive, David Panter, should hold a Nelsonian telescope to his left eye - or should it be his right?