Mansion Tax, HRA Cap, JV Concerns, Solar Power Loan, Lothian Pension Fund
0BPF pours scorn on mansion tax proposals
The British Property Federation says that the Labour Party’s proposals to raise money for the NHS through a new mansion tax ignores the need for a general reform of council tax. The proposals were announced at this week’s Labour conference in Manchester by the party’s leader Ed Miliband. Ian Fletcher, director of policy at the BPF, said: “There is recognition in our industry that council tax on high-end property is low, and with no revaluation since 1991, in desperate need of reform. Instead of responsible reform, however, we get a mansion tax, and a political stunt, which has been used before.”
Labour considers pooling of housing debt
The Labour Party’s review of housing is likely to recommend allowing councils to pool their unused borrowing with other councils, according to Emma Reynolds, shadow housing minister. Speaking to trade magazine Inside Housing, she ruled out a removal of councils’ housing revenue account caps. She told the magazine: “I don’t think that lifting the HRA cap is going to suddenly unleash lots of new homes because frankly there are lots of councils in the country that are nowhere near the cap.”
Internal report finds joint venture worries
A Somerset County Council investigation has revealed a number of problems relating to the support service contract it has with joint venture Southwest One (SWO) in 2007. The council said that relations with the outsourced provider had “at times been adversarial” and partly blamed the complexity of a 3,000 page contract document. SWO was formed by the council, technology firm IBM, the former Avon and Somerset Police Authority (ASPA), and Taunton Deane Borough Council (TDBC) services including ICT, finance, human resources and payroll services.
Councillors slam solar power loan
Bath and North East Somerset Council has agreed in principal a loan for £500,000 to a company building a solar farm. Conservative councillors have criticised the move, which they say represents a high-risk investment at a relatively low rate of return – understood to be around 2.5%. A credit limit recommended for the company by ratings agency D&B is only £15,000 according to the Conservatives.
North Somerset outlines Landsbanki repayments
North Somerset Council says that it is set to get the money it held with Icelandic bank Landsbanki by 2019. The council decided not to participate in the collective auction of local government interests organised by the Local Government Association in February. Councillors were told that the council has managed to retrieve about half of the £3m it is owed, and expects to get the rest back in instalments.
Pension fund outlines brain-drain measures
Lothian Pension Fund is considering creating a wholly-owned company to prevent the brain-drain of fund managers to other funds. The scheme earlier this year announced that it would apply to the Financial Conduct Authority to register its in-house team. A recent internal review raised concerns over the fund’s current ability to retain staff. Other alternatives include retaining investment staff as employees of City of Edinburgh Council under different terms from other council employees or outsourcing all investments.
Council company signs 12th deal
A service company owned by Norfolk County Council has formed another joint venture with a local authority. Norse Commercial Services has signed a 10-year deal with Newport City Council worth £7.3m a year. The company will provide facilities management, property and energy services.
Public pensions funds “ape” private behaviour
Public sector pension funds ape the movements of private sector funds, “herding” in and out of asset classes in reaction, according to new research. A study for The Pensions Institute said: “This may reflect the fact that managers of public sector funds are less affected by the fear of relative under-performance or that they tend to follow the more expert managers of private sector funds. It could also be because private sector funds react more quickly than public sector funds due to their governance structures and greater flexibility.”
