Agenda item
Long Term Investment Strategy
Minutes:
The Director of Finance and IT
presented the report and explained that this was a brief update on
the council’s investment strategy, but could not be too
detailed as many investments were commercially sensitive. He went
on to say that investments had always taken place within the
council and was a daily process for officers. He described that the
council had built in delegations to be able to invest, and the
investment strategy went to Full Council once per year to
re-evaluate the strategy. The Director then drew Member’s
attention to Section 5 of the report which outlined the Council
Spend Review that had taken place in October 2017 and the fact that
the council continued to save money and increase income through
investing. He stated that the finance department consider a range
of investments, and how some may be simple, for example through
credit or reference checks, but that other investments could be
more detailed. He added that as the council had a balanced budget
for the next four years, services could be enhanced or new services
could be procured, and gave the example of new police officers now
working in Thurrock. He summarised and stated that the current
investments were short or medium term, but this had bought the
council time to consider their approach to investments, and were
now considering 10-40 year deals which were at due diligence stage,
as well as other property investments.
The Chair began discussions by stating there was lots of unanimity
across the council in support of investments, which reduced the
need for spending cuts. He questioned how many of the current
investments were time limited, for example 5 year deals at
£10 million, what would happen once they ended, and if new
longer term investments would cover this timeline. The Director of
Finance and IT stated that he felt confident new investments could
cover the timeline, and directed Members attention to 6.3 of the
report and used the example of the Swindon Solar Farm, which
although was only a 5 year deal, would be standing for 25 years and
as such the contract was renewable. He added that the finance team
were looking at existing investments and if there was a possibility
for their renewal.
The Chair then questioned the types of investments the council were
making, and if these were a balanced portfolio which supported the
council’s core purpose. The Director of Finance and IT once
again drew Members attention to the example of the Swindon Solar
Farm and how this combated fuel poverty and created partnerships
which opened other opportunities. The Chair asked a follow up
question regarding how the council were mitigating risks when
investing, to which the Director of Finance and IT answered that
all investments were asset backed. He pointed out 4.3 in the report
and stated that the council often sought advice from UK and global
experts that considered due diligence on the council’s
behalf. He stated that they looked at the entire investment for
example, its security, longevity and performance. He added that the
finance team also monitor investments, which optimized outputs and
considered the effect of changing interest rates. The Chair asked
if the finance team was the right size and shape, or if specialists
should be bought in-house. The Director of Finance and IT answered
that no in-house specialism was needed as he felt outside bodies
did the work well. He added that when Thurrock Regeneration Limited
(TRL) began to develop, further support would be given to the
team.
Councillor Duffin then questioned, that although he understood the
deals were confidential, if the council were aspirational and asked
how much the investments were worth. The Director of Finance and IT
replied that although investments were currently not aspirational,
the Treasury Report coming to December Cabinet would set out the
levels of investment. He added that the Medium Term Financial
Strategy Report would show targets and returns, and the Treasury
Management Report would be coming to the Corporate O&S
Committee in January. Councillor Duffin then asked if anything had
been holding investments back, for example politics or time, as he
felt the council needed to move forward with investing. The
Director of Finance and IT answered that politics was not holding
investments back, but that they take time as the council could not
rush into them, and it could prove difficult to find new ones and
develop existing ones. Councillor Duffin then drew attention to 3.4
of the report, and asked if the figure of 1000 homes could be
up-scaled. The Corporate Director Place replied that shareholder
meetings between TRL and the council were happening regularly, and
stated 1 development was already on-site, 4 were in the planning
stages, and 20 were in the pipeline, which totalled 2000 homes
depending on feasibility. He added that following a review of the
council’s assets, there was scope beyond 1000 homes in 5
years.
RESOLVED: That:
1. The Committee considered the report and commented on the
contents.
Supporting documents: