Collaboration ‘important’ to future of treasury management
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Collaboration in treasury management provides opportunities for smaller councils to increase returns, but could be stymied by risk aversion and a lack of expertise, a Room151 roundtable heard this week.
Local authority and housing associations treasury managers from across the North of England gathered in Manchester to discuss current strategy, risk and collaboration.
Last month, Room151 revealed that London Borough of Haringey is set to outsource its treasury management to the Greater London Authority, with a second London council in discussions to join it.
Speaking at the round table, Neil Thornton, director of finance and corporate business at Salford City Council, said: “More sharing of treasury expertise I think is really important, because we simply don’t have the expertise to get into some of the more sophisticated investment instruments that are available in the market place.
“So that is an area that I’d be interested in exploring further.”
He said that he would take a look at the benefits from sharing treasury expertise with both public sector organisations as well as the private sector.
The Room151 Think Tank saw treasurers gather to discuss current 
trends and issues in local authority treasury management. Topics for discussion included bank risk and the increasing diversification of investment portfolios.
Steve Thompson, director of resources at Blackpool City Council told the gathering: “We are diversifying with a proliferation of companies, including private sector housing and converting some borrowing into private rented accommodation that’s bringing in a much higher yield.”
He said: “This is extending that, so working with other partners across the public sector who are struggling to raise capital investment and making a return on that, which is a win-win for everybody.”
However, former Boston Borough Council chief executive, Richard Harbord, introduced a note of caution. He said: “When you have got 360 authorities and the expertise in a great number of those authorities, even some of the quite larger authorities, is very poor in terms of treasury management, a lot of those authorities are so risk averse they can’t actually find anywhere to put their money, they’re skipping the whole thing, really.
“The level of expertise is quite appalling, really, and it is a very difficult thing, I think.” He said treasurers managers had to be encouraged to collaborate with larger authorities and overcome their “risk aversion”.
Under the new arrangements in London, day-to-day investing of Haringey’s cash balances will be undertaken through a pooled fund used by all the GLA’s clients.
Haringey has agreed the deal in an attempt to diversify its investments and increase investment returns while benefitting from the GLA’s larger treasury management team. A second London authority is expected to named as GLA treasury client in the near future.
Local authorities who’d like to join our London roundtable on April 26th, please register here.
