Investment falls as borrowing rises
Total council investment fell 5% in the second quarter of the financial year, compared to the same period last year. Investments stood at £34.6bn at the end of the quarter, with bank deposits making up £14bn of the total (down from £14.4bn). Total borrowing over the period rose from £90.0bn to £92.2bn.
MPs launch business rates probe
MPs on the communities and local government select committee in the House of Commons has launched an inquiry looking at the impact of delays to the introduction in 100% retention of business rate revenue. The Local Government Finance Bill, which would have introduced the move, was dropped after June’s general election. The new inquiry will assess the implications and the consequences of implementing the Fair Funding Review—the government’s review into needs and redistributionin 2020-21. Committee chairman Clive Betts said: “The secretary of state told us last month that, although the government still intends to push ahead with the policy, it will be delayed from the original schedule. This will undoubtedly have an effect on how local councils make future financial decisions.”
Shared service company ‘raises accountability concerns’
Four councils have transferred the vast majority of their staff to a new standalone shared services company. Employees at Cotswold, Cheltenham, the Forest of Dean and West Oxfordshire councils have moved to Publica Ltd. The company aims to save millions, although some councillors have raised concerns over democratic accountability.
Property advisers appointed by Basildon
Basildon Council has appointed DTZ Investors to advise it on a new property portfolio as part of its commercial asset acquisition strategy. The new portfolio will be used to generate income to fund council services. Gary Canham, chairman of the authority’s commercial and strategic asset acquisition sub-committee, said: “By investing in commercial property Basildon Council hopes to generate new income to offset the reductions in central government funding.”
Renewed call for housing revenue account cap removal
A leading think tank has issued a call for the government to remove councils’ cap on borrowing through housing revenue accounts. The Institute for Public Policy Research says that 92% of local authorities are failing to meet affordable housing need. Responding to the report, , Local Government Association’s housing spokesman Martin Tett said: “If we’re to really deliver the homes we need, with the infrastructure to support them, the chancellor needs to use the Autumn Budget to lift the housing borrowing cap, and enable councils to borrow to build once more.”
Council fossil fuel investments revealed
Councils across the UK are investing more than £16bn in the fossil fuel industry, according to campaign groups. The data shows Manchester, Dumfries and Galloway, Torfaen, Hammersmith and Fulham, and Merseyside authorities are among the most exposed to fossil fuel investments. The groups, including Friends of the Earth, have launched an interactive map ranking councils by their fossil fuel investments.