News Roundup: Property mandate, Bank downgrades, Certainty rate list, Contracting costs, LA loan returns…

Highland Council seeking manager for property debt fund
The Highland County Council pension fund has launched a tender for a single investment manager to look after a commercial property debt mandate of around £55m. The council hopes to focus primarily on UK debt through a fund that will comprise around 4% of its total portfolio. The council wants to concentrate on whole loans, but the manager will have discretion to invest in other loans. The investment will be around two thirds funded by gilts the balance from equities.

Fitch to downgrade more EU banks
Ratings agency Fitch is expecting to downgrade around 50 banks based in the European Union in the first half of 2015, according to its co-head of EMEA financial institutions. Bridget Gandy, speaking at a conference this week, said that bail-in changes mean there is currently an “unusually high proportion of EU banks’ long-term ratings on negative. However, she said: “Although the sovereign support story is dominating our rating outlooks at the moment, it is important to mention that we consider the intrinsic creditworthiness of EU banks in general to be on a stable to improving trend.”

DMO publishes certainty rate list
The Debt Management Office has published a revised list of English, Scottish and Welsh local authorities which qualify for the certainty rate discount on PWLB loans from 1 November 2014 to 31 October 2015. Introduced in 2012, the certainty rate reduced by 20 basis points the interest on loans to councils subject to meeting long-term borrowing and associated capital spending criteria.

MPs favour mansion tax alternative
More than two thirds of MPs would prefer to see additional higher-rate council tax bands than a mansion tax, according to a survey. The poll of 150 parliamentarians by polling firm ComRes was carried out on behalf of the British Property Federation. The BPF has long campaigned for reform of council tax, pointing out that it is still calculated on house prices in 1991.

Body defends council contracting
A body representing self-employed workers has slammed a story in The Times which criticised councils for spending £5bn on contractors. Simon McVicker, director of policy and external affairs at the Association of Independent Professionals and the Self Employed, said: “With councils cutting spending and more permanent staff being axed, councils are reliant on consultants to tap into their expertise on a flexible basis. By only hiring consultants as and when they are needed, the overall cost is more effectively managed, compared to hiring full time employees.

Wigan reaps loan returns
Wigan Council is set to make £162,000 from lending money to other councils. According to council figures, it has lent a total of £50m to 10 other councils, with many having already repaid the amounts. Interest rates on the loans varied between 0.27% and 0.45%

Councils count cost of licensing rules
The Local Government Association has called on the government to allow councils to set their own fees for licensing pubs and nightclubs. The LGA said that nationally-set fees introduced in 2005 mean councils have lost £169.5m over the past decade. Last February, the Home Office launched a consultation on introducing locally-set fees, but has yet to even respond to the consultation.

Government to consult further over e-invoicing regulations
The government has not included a proposal to require councils to accept electronic invoices in a set of draft regulations implementing European reforms to public procurement. The government said it is committed to increasing the use of e-invoicing by public bodies but needed to consult further on the detail. It said: “The imposition of an e-invoicing standard in the public sector that has not been agreed as acceptable, could impose costs and burdens on public bodies, suppliers and service providers.”

Fife revises financial software savings estimate
A council is set to lose 10% of predicted savings from a new financial management system after implementation problems. Fife Council in Scotland signed a deal with supplier Capgemini in 2013 to implement the new Oracle ERP as part of a transformation aimed at saving £53.6m. However, the council has reduced that estimate to £48.7m. A report released by watchdog Audit Scotland said the ERP problems – caused by poor interaction with legacy systems – were the main cause. The council has agreed a 10-point action plan to help complete the project.