Merton Council is spending £163,000 this year on NHS Stop Smoking Services while holding investments worth more than £5m in tobacco companies.

A Freedom of Information request revealed £5,584,843 was invested in the British American Tobacco Company, makers of Lucky Strike and Benson and Hedges cigarettes, and £2,296,518 in Imperial Tobacco, who make Lambert and Butler cigarettes as of December 30 last year are part of the council’s pension investment fund.

The council has stated the overall figure invested in tobacco since that date is now £5,018,763.

The information comes as the council takes over a new public health role as part of the NHS shake-up, which sees it directly responsible for improving people’s welfare through schemes such as anti-smoking campaigns.

In its health and wellbeing strategy for 2013-14 the council makes clear its goal of reducing smoking in the borough – an aim clearly contradicted by multi-million pound investments in tobacco companies.

John Warren, a nurse and former smoker, said he was shocked when he first discovered how much money councils invested in tobacco companies.

The 31-year old said: “Local authorities on the one hand are investing in these companies while on the other trying to convince everyone to stop smoking. It’s hypocritical and a double standard.

“The excuse where they need to make up the pension shortfall and tobacco is seen as a stable investment, but it’s not really as stable as it used to be.

“In the past six or seven years so many smoking regulations have been introduced so I don’t think that argument will stand the test of time.”

Four years ago the Wimbledon Guardian revealed the council, then under Conservative leadership, had £3,579,247 invested in tobacco companies. Councillor Richard Williams, chairman of Merton’s Pension Fund Advisory Committee, said the fund’s first responsibility was to prudently take care of pension holders money, but the issue would be reconsidered.

He said: “Merton Council runs the pension fund which covers its own current and former staff, and those of a number of other employers. All investment decisions are supported with professional expert advice, with environmental, social and governance issues regularly considered. Our approach is outlined in our published Statement of Investment Principles and we’ll be considering these issues further at our next meeting.”

The council plan to spend £163,044 this financial year on NHS Stop Smoking Services in its 2013-14 budget.

In light of the new responsibilities, Councillor Stephen Alambritis, leader of Merton Council, said he would be reviewing the council’s investments.

He said: “We need to be mindful of our duties, that they don’t conflict and that we are not fighting to reduce something harmful and on the other hand investing in it.”