Croydon ethical mandate, Council independence Bill, Energy investment, Norfolk/Suffolk waste deal…

Written on:July 24, 2014
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Croydon rids itself of “unethical” investments
London Borough of Croydon’s pension fund is moving all of its equity assets – a total of around £350m – to a Legal & General global ethical investment fund. The decision was taken at a meeting of the council’s pension committee and follows local elections in May when Labour wrested control of the council from the Conservatives.

MP publishes council independence Bill
Labour MP Graham Allen has published a Bill proposing greater financial freedoms to local authorities. The bill would require government to guarantee that 10p in every pound of income tax raised by central government is redistributed to councils. It would also prevent central government from capping local authority’s taxation powers and would require all local authorities to operate a balanced budget so that in any one year financial outgoings, including interest payments, should not exceed income.

Think tank: councils should invest more in energy
Councils in Britain’s cities should make more use of their powers to engage in the energy supply market and raise finance for investment in low-carbon infrastructure, according to a leading think tank. The IPPR report identified a range of business model options, exploring how and why cities could assume a central role in addressing the large investment shortfall in the energy sector.

Norfolk and Suffolk sign waste deal
Rubbish from Norfolk will be offloaded to neighbouring Suffolk under a new deal. The agreement will see 40,000 tonnes of household waste turned into electricity at Suffolk’s new energy from waste plant. Both councils stand to make savings of around £1 million each through the two-year agreement. Norfolk will reduce its landfill costs, while Suffolk will benefit from economies of scale.

London CIV begins to take shape
London Councils has set up a limited liability company to run its proposed collective investment vehicle on behalf of the capital’s boroughs’ pension schemes.  The CIV will deliver a platform through which the boroughs can collaborate and collectively invest their assets. Chair of London Councils Jules Pipe said: “There are many more milestones to achieve before the CIV will be fully operational, but it is now possible to say that we are ‘in business’.

Councils win affordable homes cash
A total of 38 councils have won cash from the government’s Affordable Housing Programme for 2015-18. The overall £886m scheme, which is also open to housing associations and registered private developers, is aimed at providing 43,821 new homes – mostly at “affordable rent” levels. Kingston Upon Hull Council won the biggest local authority award of £15.2m.

Government announces schools top-up cash
The government has announced £390m of additional funding for the most underfunded schools in England. In an announcement, education minister said that there was an overwhelming consensus that the allocation of funding to education authorities is currently unfair. He said the new funding would ensure every local area’s allocation of funding will reflect a minimum basic per pupil amount and minimum amounts reflecting other pupil and school characteristics.

Ealing uses CPO to unlock £100m cultural quarter

Written on:July 24, 2014

Ealing Council has made a compulsory purchase order to acquire a former cinema in order to progress a new £100m cultural quarter. The council said it was making the CPO as a backstop in case negotiations to buy land around the cinema fail. The order also includes the site of a neighbouring office building, bar and other properties. Council leader Julian Bell said: “While we would have preferred not to…

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LGA casts doubt over pure passive LGPS

Written on:July 24, 2014

The Local Government Association has added its voice to the growing list of organisations warning the government not to impose a wholesale requirement for passive management of funds within the Local Government Pension Scheme. Ministers, announcing a consultation on the matter in May, said that using common or collective investment vehicles (CIVs) and moving to passive investment of listed assets could save the scheme more than £660m a year in…

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Mrs Yellen and her testimony to Congress

Written on:July 23, 2014

Fed Chair Yellen used her semiannual Congressional testimony last week to present a defense of continued exceptionally easy monetary policy, yet the dovish rhetoric included acknowledgement of improved labor market data, the FOMC’s desire to form an exit strategy, and identification of pockets of financial excess. As background, the Fed now seems closer to achieving its dual goals of price stability and maximum employment today than at any point since…

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Lancashire to issue >£250m bond

Written on:July 22, 2014

Lancashire County Council has agreed plans to launch its own bond aimed at raising more than £250m. The council’s cabinet is understood to have last week approved the launch of the bond, aimed at funding the council’s borrowing requirement to fund services over coming years. Speaking to Room151 Quarterly Magazine*, county treasurer Gill Kirkpatrick said that the move could help the council protect itself against future interest rate rises. She…

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Simone Donaghy on business rate pooling

Written on:July 17, 2014

Room151 sits down with Simone Donaghy, director of finance and procurement at Nuneaton and Bedworth Borough Council to discuss business rate pooling. Room151: Who are you pooling business rates with? Simone Donaghy: We are currently in a business pooling arrangement with all of the councils in Coventry and Warwickshire. These councils are all part of the local enterprise partnership covering the area. We began investigating pooling at an early stage…

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NAPF on LGPS, DCLG Reshuffle, Planning funding, EIB rating, Junk food tax

Written on:July 17, 2014

NAPF lukewarm over LGPS reform proposals The National Association of Pension Funds has called on the government to rethink its approach to Local Government Pension Scheme reform. NAPF said proposals to create a small number of collective investment vehicles and restrict active investment strategies would only deal with a tiny proportion of the LGPS’s £47bn deficit. Joanne Segars, chief executive of NAPF, said: “A subtler and more intelligent approach than…

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Auditing the completeness of s106 liabilities

Written on:July 17, 2014

In our regular feature, Ask The Auditor, Graham Liddell from Grant Thornton UK LLP revisits two topics from previous blogs: s106 agreements and provisions for business rates.  To ask Graham a technical query, email editor@room151.co.uk In response to a blog I wrote last year, I have been asked how auditors might go about testing for the completeness of s106 creditor liabilities. Testing for completeness can be challenging: auditors need to…

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CIPFA suspends former s151 over investments

Written on:July 17, 2014

Another council finance officer has been disciplined by his professional body for financial mismanagement surrounding investments in Icelandic banks in the run up to the 2008 credit crunch. The disciplinary committee of the Chartered Institute of Public Finance and Accountancy has announced it has taken action against Andrew Tremaine, previously head of financial services, director of corporate resources and section 151 officer at the now-abolished Restormel Borough Council in Cornwall….

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Aberdeen appointed for £50m alternatives mandate

Written on:July 16, 2014

London Borough of Barking and Dagenham Pension Fund has appointed Aberdeen Asset Management for a new £50m mandate covering alternative private equity investments. The new investment is anticipated to be covered by £12m in cash and £38m which will come from the sale of equities and property investments. The appointment comes a year after the fund voted to allocate resources to private equity, social housing and diversified growth funds. Jonathan…

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