News Roundup: Coal controversy, Spending Review, Council Borrowing, HRA Debt, Ethical Investment Success
0Council refutes coal losses claim
A council has refuted claims that its pension fund has been severely hit by falling coal share prices. Last week, campaign group Platform London published data showing the East Riding of Yorkshire pension fund saw £35m, or 1.07%, shaved off its value in 18 months. A spokesman said: “It is not possible to accurately quantify the investment performance of coal assets as they tend to form part of diversified mining companies whose value is affected by many different variables.”
Spending Review cuts dubbed ‘false economy’
Reducing funding to local government funding by 40% in the forthcoming Spending Review would shear £10.5bn from local services, the Local Government Association has warned. Analysis by the LGA found that this would mean local government losing 64% of its grant funding between 2010 and 2020. Lord Porter, LGA chairman, said: “It is a false economy to reduce funding to local government while attempting to prop up other departments.”
Local government borrowing drops
Local government net borrowing was estimated at £1.1bn in September 2015, a decrease of £0.2bn on the previous year, according to new figures. The Office for National Statistics said that the change was due to a decrease in expenditure, largely on goods and services. Revised local government data have led to an increases to the estimate of local government liquid assets of £0.3 billion, £0.6 billion, £0.2 billion and £0.3 billion in April, May, July and August respectively.
Ethical investments ‘beat non-ethical’
Average returns from ethical investments outstripped “non-ethical” ones over the past year, according to new research. Investment Life & Pensions analysed the market and found that the average ethical fund returned 8.2% over the past year, compared with 6.8% from non-ethical funds. The trend is also replicated across three and five-year analyses, but not over 10 years, the report found.
Councils bid to reduce HRA debt
Councils are attempting to reduce their housing revenue debt by £10bn to compensate for the impact of government rules forcing reductions in rent for tenants of 1% a year. A submission on behalf of a number of authorities to the Parliamentary Scrutiny Unit is calling on the government to reopen the £27bn HRA debt settlement.
Fitch relaxed about bank ring-fencing
Ratings agency Fitch says that proposals by the Prudential Regulation Authority to limit the ability of banks to lend to non-ring-fenced sister banks will not affect credit ratings. The agency said the new rules would impose no added restrictions on dividend payments, allowing some fungibility of funding and capital within group companies.
Aberdeen slams business rate move
The finance convener of Aberdeen City Council, Willie Young, has dismissed moves by the Scottish Government to allow Scottish councils to set their own business rates as a “con-trick” which will “do nothing” to boost the city’s economy. He said: “Mr Swinney’s announcement is nothing more than a con trick which will do nothing to enhance business growth in Aberdeen, simply because any loss of income from reducing business rates will be incurred by the local authority and must be funded by the authority’s wider budget.”
