• Home
  • About
  • Subscribe
  • LATIF
  • Conferences
  • Dashboard
  • Edit My Profile
  • Log In
  • Logout
  • Register
  • Edit this post

Room 151

  • 151 BRIEF

    What's New?

  • Inflation ‘biggest concern for LGPS professionals’

    May 20, 2022

  • LGA calls for government support as regulators face staffing issues

    May 19, 2022

  • WMCA signs £4bn investment agreement with L&G

    May 18, 2022

  • Bill will give UK Infrastructure Bank power to lend directly to councils

    May 18, 2022

  • £400bn pension group collaborates on climate transition initiative

    May 17, 2022

  • CIPFA rejects proposal for vote on publication of fraud hub report

    May 17, 2022

  • Treasury
  • Technical
  • Funding
  • Resources
  • LGPS
  • Development
  • 151 News
  • Blogs
    • David Green
    • Agent 151
    • Dan Bates
    • Richard Harbord
    • Stephen Sheen
    • James Bevan
    • Steve Bishop
    • Cllr John Clancy
    • David Crum
    • Graham Liddell
    • Ian O’Donnell
    • Jackie Shute
  • Interviews
  • Briefs

Forest of Dean quits £50m retail deal

0
  • by Chris Smith
  • in 151 News · Treasury
  • — 7 Nov, 2019

Plans by a Gloucestershire council to invest £50m in a retail development have been abandoned due to the rise in government lending rates.

Forest of Dean District Council had been exploring the option of investing in the Cathedral Square development in Worcester to generate revenue that could plug a £1.2m shortfall caused by government funding cuts.

SAVE THE DATE – LATIF NORTH
March 25th, 2020, Manchester
Council treasury investment & borrowing

The plan to invest in the retail development, outside of the council’s boundaries, had been initially signed off at a meeting – closed to the public – in September.

The deal was to have been funded by borrowing from the Public Works Loans Board which raised its interest rates last month.

It is understood by www.Room151.co.uk that the plan was dropped at another meeting held behind closed doors due to the hike on PWLB interest rates.

Concern over the proposed deal had been heightened among councillors after details of investment were leaked twice to the local media.

Officers have been left looking for alternative ways to help fill a £1.2m hole in its finances.

The council’s budget had allocated £350,000 in its accounts for interest and investment income which along with money from reserves would balance the books.

In February’s budget discussions, councillors were told: “Part of our drive towards financial sustainability includes identifying new opportunities to generate income and investment in projects which provide good financial returns.”

The council’s financial position has already generated a fierce row between councillors over borrowing plans – including for borrowing plans to be debated by all members.

Opposition councillor Harry Ives challenged Tim Gwilliam, leader of Forest of Dean, at a full council meeting last month: “This council has been debt free for more than a decade.

“The council’s treasury management strategy currently authorises borrowing of up to £83m. Can I ask the leader to confirm his plans for borrowing against this limit.”

Cllr Gwilliam responded: “As you will be aware the council has faced and continues to face unprecedented cuts from government in the amount of funding it receives, resulting in a £1.2m deficit over the period of the medium term financial plan approved in February. This position has been facing this council since 2013.”

He added: “I can confirm therefore that my plans are: to continue to listen to our financial advisors and the advice of officers, to listen to suggestions of investments based on return put forward by the cross party asset management group.”

The Treasury – and Ministry for Housing, Communities and Local Government – had expressed concern before the PWLB decision – about the borrowing decisions by councils for retail developments at a time when the High Street is under pressure.

In his last appearance before MPs ahead of the general election, communities secretary Robert Jenrick said: “There has been some abuse of the Public Works Loan Board by a minority of local authorities who have become highly indebted, as a result of boring very cheaply, and – perhaps even more concerningly – a small number of local authorities who have used it to purchase what I think are quite risky assets outside of their local authority boundaries.

“Purchasing shopping centres and, and so on, may well not turn out to be good investments at all.”

A Forest of Dean district council spokesman said the discussions and decisions had been restricted and that it would not be commenting.

The Room151 Weekly Newsletter covers local government treasury and pension investment, funding, development, resources and technical finance. Register here. 

The LGPS Quarterly Briefing focuses purely on pension fund investment. Register here.

Share

You may also like...

  • On the hunt in high yield 24th May, 2021
  • LGPS seeking clarity on levelling up agenda and pension pooling 17th Mar, 2022
  • Q&A: Bond agency responds to ‘ill-informed speculation’ 4th Jul, 2021
  • Code revision will end ‘intentional misinterpretation’ 28th Jul, 2021

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • Register to become a Room151 user

  • Latest tweets

    Room151 20 hours ago

    2022 LGPS valuations: difficult discussions in uncertain times: Michelle Doman looks at the impact of inflationary pressures, the war in Ukraine, climate risk and Covid-19 on employer contributions. At the start of 2022, for Local Government Pension… dlvr.it/SQlvy9 pic.twitter.com/Dd0lrHjWNb

    Room151 23 hours ago

    Investing today: nowhere to hide: Partner Content: Alex Stanley from Ardea Investment Management suggests that investors have few places to hide amid a synchronised sell-off in both bonds and equities. However, there are catalysts that[...] dlvr.it/SQlNVC pic.twitter.com/KkGGnduzPL

    Room151 2 days ago

    Treasury to restrict PWLB loans to councils at risk of non-repayment: The Treasury has released new guidance that restricts local authorities’ access to Public Works Loan Board (PWLB) advances if there is a “more than negligible risk” of a council’s… dlvr.it/SQhLTV pic.twitter.com/vBsS7xMJdb

    Room151 2 days ago

    Mixed reaction to proposed government intervention powers: There has been a mixed reaction to the government’s legislative plans to strengthen its intervention powers over local authority finances. The Levelling Up and Regeneration Bill has proposed… dlvr.it/SQhLMB pic.twitter.com/50foWxpPGs

    Room151 2 days ago

    Post-Brexit struggles for national and local government regulators. @LGAcomms @NAOorguk Click the link below to read 🔻🔻 room151.co.uk/brief/lga-call… #Brexit #government pic.twitter.com/s3c8ySGy5G

    Room151 2 days ago

    CIPFA: a question of transparency: Roman Haluszczak’s campaign for publication of the independent report into the collapse of CIPFA’s London Counter Fraud Hub has been rejected again by the institute. He is now calling for[...] dlvr.it/SQgC5V pic.twitter.com/08fWsHFF4g

    Room151 3 days ago

    Back to the future for the PWLB: The Public Works Loan Board is tightening its lending criteria to ensure that loans will be repaid by local government borrowers. But, asks Peter Findlay, shouldn’t they have been doing[...] dlvr.it/SQcmmm pic.twitter.com/bVv4fe0Xlv

    Room151 3 days ago

    Great piece from Peter Findlay on the PWLB’s tightening of its lending criteria. He raises some pointed questions for the Treasury and explains why the ‘casino council’ characterisation was simplistic and inaccurate. #PWLB #localgov room151.co.uk/treasury/back-…

    Room151 3 days ago

    The Queen's speech highlighted the need for accelerating UK infrastructure investment into levelling up projects and cutting emissions. @UKInfraBank #QueensSpeech #ClimateAction #emissions Click the link below to read 🔻🔻 room151.co.uk/brief/bill-wil… pic.twitter.com/hFmF2veVIa

    Room151 3 days ago

    Huge funding heading to the @WestMids_CA from @landg. @andy4wm #LevellingUp #netzero #regeneration Click the link below to read 🔻🔻 room151.co.uk/brief/wmca-sig… pic.twitter.com/ajhZhia6mx

    Room151 3 days ago

    LGPS governance, Cagney and Lacey style: What regulatory response can be expected following the publication of the Good Governance project’s Phase 3 report and the closure of the Single Code of Practice consultation? Susan Black offers[...] dlvr.it/SQbfXf pic.twitter.com/xwqHOEu2AP

    Room151 4 days ago

    More evidence of the importance of emerging markets in the journey to net-zero. @BordertoCoast @BrunelPP @northernlgps @EAPensionFund @WYPF_LGPS Click the link below to read 🔻🔻 #LGPS #NetZero #NetZeroCarbon #EmergingMarkets room151.co.uk/brief/400bn-pe… pic.twitter.com/qCm0EGxzLn

  • Categories

    • 151 News
    • Agent 151
    • Audit
    • Blogs
    • Business rates
    • Chris Buss
    • Cllr John Clancy
    • Council tax
    • Dan Bates
    • David Crum
    • David Green
    • Development
    • Education
    • Forum
    • Funding
    • Governance
    • Graham Liddell
    • Housing
    • Ian O'Donnell
    • Infrastructure
    • Interviews
    • Jackie Shute
    • James Bevan
    • Jobs
    • Levelling up
    • LGPS
    • Mark Finnegan
    • Net Zero
    • Private markets
    • Recent Posts
    • Regulation
    • Resources
    • Responsible investing
    • Richard Harbord
    • Risk management
    • Social care
    • Stephen Fitzgerald
    • Stephen Sheen
    • Steve Bishop
    • Technical
    • Transport
    • Treasury
    • Uncategorized
    • William Bourne
  • Archives

    • 2022
    • 2021
    • 2020
    • 2019
    • 2018
    • 2017
    • 2016
    • 2015
    • 2014
    • 2013
    • 2012
    • 2011
  • Previous story Ministers reject creation of new Audit Commission-style watchdog
  • Next story Advisor warns pension pools over sub-fund closure costs

© Copyright 2022 Room 151. Typegrid Theme by WPBandit.

0 shares