• Home
  • About
  • Newsletters
  • Conference
  • TMS Links
  • Calendar
  • Log In
  • Register

Room 151

  • 151 BRIEF

    What's New?

  • LGPS infrastructure partnership invests £1.8bn in renewables

    December 12, 2019

  • Brunel appoints global high alpha managers

    December 11, 2019

  • City of London completes £250m debt deal

    December 11, 2019

  • Mystery bidder appointed on £250m waste contract

    December 11, 2019

  • Investors withdraw from property fund

    December 11, 2019

  • Highland councillors back tourist tax

    December 11, 2019

  • 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
  • Jobs

Property investment set to face ‘security, liquidity and yield’ test

0
  • by Colin Marrs
  • in 151 News · Treasury
  • — 14 Sep, 2017

Melanie Dawes, DCLG. Photo: Tina Miguel

The most senior civil servant in charge of local government has outlined Whitehall’s approach to helping councils avoid wasteful investments in commercial property.

Melanie Dawes said the government will consult on extending local authority investment code requirements on financial investment to cover real estate purchases.

The permanent secretary at the Department for Communities and Local Government (DCLG) reiterated her department’s continuing desire to assist councils derive income from commercial activities.

She told delegates at Room151’s annual Local Authority Treasury Investment Forum: “We are working with CIPFA to update statutory codes published by the department.”

“We are looking at extending the requirements to consider security, liquidity and yield, in that order, to all investments, and not just financial investments.

“We want to enhance the transparency requirements and we are looking at also updating the guidance on translating minimum revenue provision to make sure that you individually, and collectively, are not storing up repayments in the future in a way that is not fully understood.”

Dawes played down any fears the government might attempt to dampen property investment through statutory restrictions or ministerial directions, saying: “That sense that one size doesn’t fit all is very important. We are not in the market for saying this is OK and that not, or some sense of trying to be restrictive about this.

“I don’t think we would know how to do that from central government, actually. And what we have learnt over the past 10 to 15 years is that if we do get too prescriptive, often we create a cliff edge that gets us all into trouble. That sense of one size fits all is very important.”

News of the consultation was welcomed by Andrew Burns, CIPFA president and director of finance and resources at Staffordshire County Council.

He called on local authorities to respond to the consultation when it comes forward and urge central government to retain self-regulation for local government.

“It is important that we resist those arguing for a rules-based approach,” he said.

Dawes attempted to reassure councils that her department is unlikely to remove the ability of local authorities to pursue commercial initiatives and investments.

She said: “We do support what you are trying to do here. We do not want to restrict opportunities for you to use commercial structures. We acknowledge that often, where it is about regeneration, nobody else is going to take that perspective. And social outcomes matter. But purely commercial outcomes can be appropriate as well.”

But she emphasised that councils need to show they are transparent about their decision making and managing risk effectively.

She added that: “People are entitled to know that the decisions being made are proportionate to the size of the council, the size of the income flows and the asset base and balance sheet.”

Lorna Baxter, chief finance officer at Oxfordshire County Council, questioned how liquidity could be a consideration in long-term property investment, and Dawes said the question was likely to be raised during consultation.

Get the Room151 Newsletter

Share

You may also like...

  • MHCLG: Further action on borrowing for property investment to be ‘proportional’ 19 Sep, 2019
  • LGA calls for task force probe of council reserves 11 Sep, 2015
  • LGPS Pools Roundup: Access operator, BTC Interim CIO, Central recruits four, London CIV loses CIO 24 Jan, 2018
  • Sponsored Roundtable: CCLA’s Diversified Income Fund and the appetite for new asset classes 11 Oct, 2017

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • Register to become a Room151 user

  • Latest tweets

    Room 151 3 days ago

    Court rejects NHS trusts’ claim for millions in business rates relief: A judge yesterday threw out a claim by 17 NHS trusts that they are charities and should receive millions of pounds of business rates relief. Derby Teaching Hospitals NHS Foundation[...] dlvr.it/RL8F7D pic.twitter.com/fxt6Sor3Q7

    Room 151 3 days ago

    Authorities turn away from PWLB in favour of borrowing from peers: Councils borrowed just £80m through the Public Works Loan Board (PWLB) during the first full month since the Treasury’s rate rise, a mere 4% of August’s total. Just two authorities[...] dlvr.it/RL8F57 pic.twitter.com/zIOf1KlNpc

    Room 151 4 days ago

    County introduces new rules after £9.1m funds gaffe: A report to Hertfordshire’s most recent audit committee meeting said the “treasury control failure” had come to light in August, one day after the multi-million-pound redemption was not received.… dlvr.it/RL5DP0 pic.twitter.com/6LvY71zUew

    Room 151 4 days ago

    News just in - #WorkingtonWoman is believed to represent roughly half the electorate in Workington.

    Room 151 5 days ago

    LGPS urged to put the ‘social’ back into ESG: LGPS committee members and managers have been asked to elevate the importance of the “S” in ESG (environmental, social and governance) to help protect workers’ rights as the world confronts[...] dlvr.it/RL1c9p pic.twitter.com/xv590d3qm8

    Room 151 5 days ago

    Room 151’s top 10 news stories of 2019 room151.co.uk/treasury/room-… #localgov

    Room 151 6 days ago

    Room 151’s top news stories of 2019: As an eventful year for local authority treasurers draws to a close, Room 151 takes a look at the top 10 stories from the sector during 2019. 10. Spending watchdog[...] dlvr.it/RKy49q

    Room 151 1 week ago

    Council files £130m claim against PFI contractor for post-Grenfell estate costs: London Borough of Camden is suing a former PFI partner and its main subcontractors for £130m for costs relating to the evacuation of one of its housing estates the week[...] dlvr.it/RKkR8C pic.twitter.com/zIfQcikMjq

    Room 151 1 week ago

    Review highlights ongoing financial management issues at Northamptonshire: Northamptonshire County Council’s new section 151 officer should draw up plans to repatriate powers from government commissioners amid ongoing problems with financial management,… dlvr.it/RKjLkN pic.twitter.com/tQIxMDawQV

  • 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

    • 2019
    • 2018
    • 2017
    • 2016
    • 2015
    • 2014
    • 2013
    • 2012
    • 2011
  • Previous story Low bank rates drive allocation to property funds and lending to local authorities
  • Next story Volatility gives ultra-short duration strategies the chance to shine

© Copyright 2019 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