Agenda item

The report seeks to consolidate the investments and borrowing strategy for the year ahead by detailing how and where the Council will invest and borrow in the forthcoming year, within a particular framework.

The Council considered a report (Agenda Item 4) which sought to consolidate the Investment and Borrowing Strategy for the year ahead by detailing how and where the Council would invest and borrow in the forthcoming year, within a particular framework.

MOTION: Proposed by Councillor Ross Mackinnon and seconded by Councillor Howard Woollaston:

“That the Council adopt the following recommendation:

a)    To agree and adopt the proposed Investment and Borrowing Strategy for 2023/24.”

Councillor Mackinnon in introducing the report explained how the Strategy set out the approved institutions for treasury assets, the prudential limits for investments, the accrued sources of borrowing, the recommended borrowing limits for the next three years, and also provided a long term forecast for the Council’s borrowing requirements. The Strategy authorised the Council to place deposits in UK Government Bonds, UK Building Societies and Banks with sound credit ratings, other local authorities, and triple rated money markets. The Council was also authorised to lend to registered charities, public sector bodies and Council-owned companies and joint ventures. He mentioned that the amount of funds the Council could invest with any one institution was £8m.

The Strategy proposed an increase in borrowing over the medium term to support the Council’s Capital Strategy, with the borrowing primarily undertaken through the Public Works Loan Board, and he explained how other options would be explored as well, which might include building upon the launch of the UK's First Community Bond back in July 2020. The Strategy had already generated significant financial savings in the Revenue Budget and was forecast to continue to do so.

The report also set out the Council’s commercial property portfolio and the investment returns made to the Council. Councillor Mackinnon highlighted how the portfolio had performed well with a consistent return on investment providing over £1 million per year, and he expected this to continue in the future.

Councillor Jeff Brooks said that the Liberal Democrat Group did not take issue with the report as over many years the Investment and Borrowing Strategy had been well managed by officers. There had been an upturn for the Administration with greater receipts on interest rates movements. What his party would like to see was a greater degree of ethical investment. The Council utilised banks to get interest on our funds but was there awareness of where they invested their money? Cllr Brooks made reference to his first hand experience of working with the Fire Authority on their investment strategy where they only invested in ethical countries. 

Councillor David Marsh informed that he did not have too much to quarrel about with the report but he did raise concern about the commercial investments, as he had mentioned in previous years. It was mentioned that the return was £1 million but in fact it was £3.5 million with £2.5 million going towards maintenance and servicing the properties. West Berkshire’s residents would be surprised to learn that the Council had invested in a petrol station in the West Midlands, a bank in Eastbourne and a supermarket in Yorkshire. People would like to see this money invested locally in West Berkshire and bring social value to the investments. Instead of purchasing the aforementioned properties the Council could have invested in development within West Berkshire proving income as well as housing. He recommended that the properties mentioned should be sold with the proceeds invested locally.

Councillor Woollaston disagreed with Councillor Marsh’s comments as the Council was performing immaculately and had a diversified portfolio that spread the risk. There were many examples of other local authorities that had not been so prudent. These included Warrington who had £1.8 million of debt, Croydon were seeking a £500 million bailout from the Government with over £1.6 million of debt and Woking had £1.95 million of debt. This local authority acted prudently and were getting a decent return on their investments. 

Councillor Mackinnon made concluding comments and said that, with regards to the comments made by Councillor Brooks, he would be happy to investigate ethical investments whilst maintaining an appropriate return for residents. With regards to the comments made by Councillor Marsh he said he agreed with the reply given by Councillor Woollaston. The £1 million return was a good investment. In order to achieve a higher return it would be necessary to take higher risks with public money. The diversification of the portfolio helped protect it from regional dips in the property market. The investments also provided benefits for West Berkshire residents by generating millions of pounds of income that would otherwise have to be raised by taxation.

The Motion was put to the vote and duly RESOLVED.