SCOTTISH Borders Counci has agreed to an investment strategy and associated recommendations relating to the Common Good and Trust Funds with the aim of improving long-term capital and income growth.
The approved strategy seeks to maintain the real value of investments and provide common good funds with income from a broad range of investments.
The agreed investment strategy and associated recommendations apply to the management of surplus capital cash balances and investments of the funds and do not affect the arrangements for the management of revenue cash balances, property or the disbursement of grants.
There has been increasing pressure to address the significant decrease in income generated from common good cash balances following the financial crisis in 2008 which has resulted in the bank base rate reducing to 0.5%pa.
The anticipated benefits of a single investment strategy offer scope for efficiencies, economies of scale and other cost savings.
It will also potentially open up the opportunity to those funds currently only investing in cash to achieve benefits through long term capital growth.
And the recommendations approved by SBC include: the use of a single Investment Strategy for the capital balances held by Common Good Funds and Trust Funds under the council’s administration and the adoption of the Investment Strategy; that the overall investment objective for the Investment Strategy is to achieve long term capital and income growth that will maintain the real value of the investments and provide an attractive level of income from a broadly diversified portfolio of equities, bonds and other asset classes; individual Common Good Working Groups review and consider the appropriate level of Revenue and Capital balances for their Fund annually as part of their budget setting process, making recommendations to council where appropriate; to approve transfers between Revenue and Capital balance categorisation up to the value of £10,000 and to make recommendations to council in relation to transfers between Revenue and Capital balance categorisation of a value greater than £10,000.
Councillor Neil Calvert, said: “The investment strategy and recommendations agreed by the Council will ensure that common good and trust funds retain their individual identities while being managed and overseen by the Council’s working groups. This is not about merging funds and there will be no changes to local member involvements.
“The individual common good working groups will now consider what level of revenue and capital they believe to be appropriate for their funds, reviewing this annually and making recommendations to the Council where appropriate.”
Councillor Carolyn Riddell-Carre, chair of the Working Group, added: “It’s so important that we look after the common good capital funds so that they retain their value for the long term.”