News round-up: Capital investment rises, dollar hedging, fraud scheme prize, Birmingham’s regeneration plan
0Capital investment on the rise
Councils are investing more in capital projects than four years ago, according to new research. Think tank New Local Government Network says that cash-strapped local authorities are becoming sophisticated financial investors, using low interest rates to help make themselves independent of central government. It called on local government to continue to take advantage of low rates to drive financial self-sufficiency.
Adviser advises investment hedging
Aon Hewit has recommended London Borough of Barking and Dagenham hedge some of its pension investments in US dollars. In a report to councillors, the firm said: “As the US is in a stronger economic position than Europe and Japan and also has little direct trade impact from the Brexit shock, we think that sterling is likely to weaken more against the US dollar than the euro and yen. An improving current account will ultimately provide sterling support but not in the shorter-term.”
Fraud scheme scoops prize
A collaboration between Liverpool City Council, HMRC and the Department of Work and Pensions has won the outstanding recovery solution category at the inaugural Government Counter Fraud Awards. The inaugural Awards ceremony was co-hosted by the Cabinet Office, the Chartered Institute of Public Finance and Accountancy’s (CIPFA) Counter Fraud Centre and the National Crime Agency (NCA).
Birmingham unveils regeneration investment
Plans for almost £1bn of investment in a major Birmingham regeneration scheme have been announced. The Curzon Investment Plan is an ambitious 30-year strategy to unlock and regenerate the 141 hectares of land around the planned HS2 Curzon Street Station, led by the Greater Birmingham & Solihull LEP (GBSLEP) and Birmingham City Council. In total £907m is being allocated to a variety of projects, including an extension to the city’s Metro scheme.
Call for council-created credit unions
Councils should create credit unions to provide an alternative to payday lenders, according to a new report. In a report, the Co-operative Party and the Association of British Credit Unions said authorities should provide crisis loans instead of social funds, support social housing tenants to pay rent under Universal Credit, offer credit in competition with high-cost payday lenders, and support local start-up businesses through lending to entrepreneurs.
Council buys car showroom
Portsmouth City Council has bought a Mercedes Benz showroom to generate income. The council paid £8.75m for the unit near Southampton International Airport as part of its property investment strategy. The leader of Portsmouth City Council, Donna Jones, said: “We are borrowing money cheaply, thanks to low interest rates across the UK on fixed rates, and then investing that money in long-term commercial purchases such as the freehold of the Mercedes dealership. The rent that comes in pays our borrowing costs and provides us with a profit which we are using to pay for statutory and non-statutory council services.”
