• Home
  • About
  • Subscribe
  • Conference
  • Events Calendar
  • Webcast151
  • MOTB
  • Log In
  • Register

Room 151

  • 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

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...

  • Newham in danger of missing deadline to publish accounts Newham in danger of missing deadline to publish accounts 19 Apr, 2018
  • Councils have ‘moral duty’ to preserve spending power through investment, says GLA investment chief Councils have ‘moral duty’ to preserve spending power through investment, says GLA investment chief 27 Sep, 2018
  • News round-up: Brexit role for councils, LGPS monitoring contract, road repairs and council tax rises News round-up: Brexit role for councils, LGPS monitoring contract, road repairs and council tax rises 30 Mar, 2017
  • CIPFA suspends former s151 over investments CIPFA suspends former s151 over investments 17 Jul, 2014

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • Register to become a Room151 user

  • Latest tweets

    Room151 13 hours ago

    Could 2021 be less eventful for LGPS, please?: Barry McKay looks at McCloud, the 95k exit cap, employer risk and investments to see what to expect for LGPS in the coming year. On one hand, 2020 was in[...] dlvr.it/RtslFd pic.twitter.com/H4debuPmGG

    Room151 13 hours ago

    Fixed income investing can help target both financial and sustainability targets: Sponsored article: Adam Whiteley offers a guide to the ESG benefits of investing in fixed income. Investing responsibly in fixed income can be crucial for local government… dlvr.it/Rtsl9h pic.twitter.com/khJL1xNfGh

    Room151 2 days ago

    Going beyond the standard metrics for climate change: Sponsored article: With climate change an investment imperative and an imminent reporting requirement, Ritesh Bamania argues UK pension schemes should look beyond today’s standard metrics. With… dlvr.it/RtnpLS pic.twitter.com/6ABaFHyS9I

    Room151 3 days ago

    LGPS webinar: Governance the key to TCFD implementation: LGPS funds have been warned that governance is it at the here of Whitehall plans to impose a new climate reporting regime on pension funds. In January the Department for[...] dlvr.it/RtjwNq pic.twitter.com/YMiMdmRyzU

    Room151 3 days ago

    LGPS webinar: Central bank management of bond purchasing could affect all asset classes: When the government debt caused by the pandemic is eventually tackled there may be a huge impact on assets of all classes, according to a leading investment expert… dlvr.it/RtjwJx pic.twitter.com/7v8K5vMYHo

    Room151 3 days ago

    #LGPS readers...what to do about #bonds? room151.co.uk/blogs/lgps-web… @BrunelPP 's new CIO, David Vickers tackles a problematic area #centralbanks #assetallocation #fixedincome pic.twitter.com/yUJr0azbKv

    Room151 3 days ago

    LGPS Challenges: Balancing Realpolitik and responsible investment: Elizabeth M. Carey warns of the perils of an ESG echo chamber as countries outside the West continue to invest in fossil fuels. Anyone working with the LGPS probably feels[...] dlvr.it/RtjMpq pic.twitter.com/MykIYxuYri

    Room151 6 days ago

    How can local government ‘build back better’?: Beverley Gower-Jones looks at the options for driving small business entrepreneurship in clean technologies. Innovation is essential for local authorities to save money and reduce emissions, it is the… dlvr.it/RtT3nS pic.twitter.com/bSMB6OG70t

    Room151 7 days ago

    Helen Randall: Spelthorne report places spotlight on ‘controls’: Fresh criticism of Spelthorne Council raises the question of what “good” controls look like when negotiating a property deal. Spelthorne Council’s continuing debacle over property… dlvr.it/RtSPhy pic.twitter.com/9uCOJgBcH6

    Room151 7 days ago

    Step-out strategies: Hitting the sweet spot between liquidity and ultra-short duration: Sponsored article: Jemma Clee describes how an ultra-short duration strategy can help local authorities enhance returns. Despite the expectation of a low, and… dlvr.it/RtSPZb pic.twitter.com/pdXPpv5lcN

    Room151 1 week ago

    What role will climate change have on the pricing of government bonds?: Sponsored article: Kerry Duffain finds that “vulnerability and resilience to climate change” have a significant impact on the cost of government borrowing. Ardea Investment… dlvr.it/RtNKv7 pic.twitter.com/wDjT31x4Yt

    Room151 1 week ago

    ESGenius: Slashing emissions will fuel green growth for decades: Sponsored article: Velislava Dimitrova argues that a big enough investment could mean transition to a low, or no, carbon economy can become a reality. The world needs to slash carbon[...] dlvr.it/RtKZJp pic.twitter.com/cd8S3ijERl

    Room151 1 week ago

    Prudential code: “Not perfect, but its heart is in the right place”: The new Prudential Code offers revised rules for borrowing. Nikki Bishop is sceptical it will work while Gary Fielding offers his support. Nikki Bishop I have been asked to give[...] dlvr.it/RtKZFh pic.twitter.com/OriN28lXcb

  • Categories

    • 151 News
    • Agent 151
    • Blogs
    • Chris Buss
    • Cllr John Clancy
    • Dan Bates
    • David Crum
    • David Green
    • Development
    • Forum
    • Funding
    • Graham Liddell
    • Ian O'Donnell
    • Interviews
    • Jackie Shute
    • James Bevan
    • Jobs
    • LGPSi
    • Mark Finnegan
    • Recent Posts
    • Resources
    • Richard Harbord
    • Stephen Fitzgerald
    • Stephen Sheen
    • Steve Bishop
    • Technical
    • Treasury
    • Uncategorized
  • Archives

    • 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 2021 Room 151. Typegrid Theme by WPBandit.

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we'll assume that you are happy to receive all cookies from this website.OK