Agenda item

(CSP: GP2)

Purpose:

·         The Council has the opportunity to be part of a pilot of local authorities to issue community “bonds” (either through a bond or loan mechanism) that provide funding for infrastructure. To align with the Council’s climate emergency and emerging Environment Strategy, it is proposed that the community bond becomes a ‘Climate Change Bond’ to fund activities that help deliver the commitment to be carbon neutral by 2030.

·         This report sets out the ability to take part in the pilot and for the Council to seek to issue a community bond or loan that investors can buy into.

Resolved:

·         To grant approval for the Council to take part in the pilot scheme for Community Bonds.

·         That a subsequent paper would come back to the Executive to approve or otherwise the issuing of Community Bonds.

This decision is eligible to be ‘called-in’.  However, if the decision has not been ‘called-in’ by 5.00pm on 30 December 2019, then it will be implemented.

The Executive considered a report (Agenda Item 5) which set out the ability for the Council to take part in a pilot of local authorities to issue community “bonds” that provide funding for infrastructure.

Councillor Ross Mackinnon introduced the report and stated that this was an excellent scheme. In order to align with the Council’s climate emergency and emerging Environment Strategy, it was proposed that the community bond be established as a “Climate Change Bond” to fund activities to help deliver the commitment to be carbon neutral by 2030.

The scheme would be administered by a private company on behalf of the Council. This could enable the Council to access borrowing rates at a cheaper rate than via the Public Works Loans Board. If successful, the pilot could be rolled out more widely, including to residents. This would enable residents to take a personal stake in the Environment Strategy.

Councillor Steve Ardagh-Walter seconded the report. Its proposals would strongly support the Environment Strategy.

Councillor Carolyne Culver welcomed the proposal. She did however have a number of queries. She firstly sought reassurance that the funding would be utilised within West Berkshire. Councillor Mackinnon expected the vast majority if not all funding to be used in West Berkshire to help deliver the Environment Strategy.

Councillor Culver noted that an external grant of up to £25,000 was anticipated. However, she questioned the certainty of this funding when considering that it was European Union (EU) funding. Councillor Mackinnon advised that to date, the grant was assured. He was not aware of any doubt over receipt of this funding.

Councillor Culver’s next queried if there were examples of other successful projects run by Abundance (the private company referred to). Councillor Mackinnon explained that many local authorities had worked with Abundance.

In response to Councillor Culver’s final question on this item, Councillor Mackinnon felt that the community bond would be an attractive investment that would achieve a positive rate of return.

Councillor Culver stated that she looked forward to hearing more. She raised the importance of publicising this to residents at the appropriate time.

Councillor Adrian Abbs also felt that this was a good initiative. He did however have concerns in relation to the timescales being worked to when the Council had committed to being carbon neutral by 2030, and whether the Council needed to be more ambitious. As this was only a pilot scheme it would take time before full implementation. Councillor Mackinnon felt that the Council was being suitably ambitious. He felt that the pilot would be a useful way to test the scheme in the first instance.

RESOLVED that:

·         Approval be granted for the Council to take part in the pilot scheme for Community Bonds.

·         A subsequent paper would come back to the Executive to approve or otherwise the issuing of Community Bonds.

Other options considered:

·         Not progress with the pilot. This has been discounted as this is a rare opportunity to be part of a scheme such as this at its inception.

·         Progress with other non-Public Works Loans Board (PWLB) borrowing. This option is being progressed simultaneously to ascertain the options for private sector and public sector borrowing, but will be on a similar timescale to the Community Bond. The Community Bond alone will not provide, in the pilot, all of the Council’s borrowing requirement for the coming years.