Council looks to make more cash from investments
Local Democracy Reporter KIRKLEES Council is looking to make more cash from its investments as the effects of austerity continue to bite.
But whilst it could be making millions and not hundreds of thousands of pounds from its treasury management, councillors have advised that a cautious approach is still the best approach.
During the first six months of 2018/19 the council invested £43m, which generated £120,000.
It was considered to have performed well against other local authorities, some of which had better rates of return based on investing in portfolios such as the Local Authorities’ Property Fund, which gives councils exposure to the commercial property market.
Balancing a prudent, risk averse approach against the potential to make more money was debated at a meeting of Kirklees’ full council.
And councillors from across the political spectrum found themselves broadly in agreement that more money could be made but at a risk to the authority.
Clr Andrew Pinnock (Lib Dem, Cleckheaton) observed that Kirklees could do better when compared to other authorities that were getting “huge returns” on their investments.
He said: “I’m not suggesting for one moment that the council goes to ‘beat’ everybody else [but] can the council move up the table a bit?
“If the Local Authorities’ Property Fund helps us in that direction, albeit slowly, then we should certainly aim to improve our yield from our investments given we are still in a time of austerity.
“If we can get money legitimately from other sources then I think we should, without too much risk. There is clearly risk involved but too much is bad.
“We should in the long-term try to aim for higher returns.”
Conservative group leader Clr David Hall (Liversedge and Gomersal) praised the professionals who man- aged the council’s investments and suggested they be given more room to manoeuvre.
He urged caution against following “the big boys” who invest in what he described as “get rich quick schemes” but added, “If we give them the flexibility to do a little bit more we could achieve better returns.”
Liberal Democrats’ group leader Clr John Lawson (Cleckheaton) cautioned against becoming attached to longterm funds that carried with them lengthy release notices and penalties.
“There are questions about what we are locking ourselves into,” he said.
In outlining the half-yearly monitoring report on treasury management, Clr Graham Turner (Lab, Denby Dale) said the council was “seriously looking” at whether the fund was an option.
“We should get a better increase but we aren’t going to back the house on this. We’ve got to be careful.
“The best result is only 4.5%, which is not huge but the amount of risk in there, I suspect, would be enormous.
“That might be fine for some local authorities that have very strong balance sheets and millions of pounds in the bank. We’re not in that position to take that level of risk.
“Let’s see if we can take a bit more risk and invest a little bit more of our money.”