On Tuesday (19th Nov) at the Babergh District Council meeting we were treated to the half yearly report on Treasury Management (to 30thSeptember 2024). The paper was full of gems and insights, some overt and others deducible.
For example, in 2015 we invested £2 million in a UBS Multi Asset Income Fund. The fund was closed in September and £1.469 million was returned to Babergh with a resultant capital loss of £531,000. The leadership seemed quite relaxed that overall net interest £727,000 had been received over the life of the investment, so that there was no overall loss.
Except that, as far as I can ascertain we have received interest on a loss making investment and have not made any provisions for the capital loss.
The interest received has gone to revenue and has been spent and so we have been like gamblers spending our winnings but running our losses.
The capital loss is expected to be charged to this year’s accounts.
What else might there be lurking in the local authority financial swamps? Well, we have a nominal £2 million invested in the CCLA Local Authority Property Fund which was valued at £4,520,000 in March suggesting an ongoing capital value loss of £480,000. Similarly, we have a nominal investment of £2 million in the Schroder Income Maximiser Fund which in March was valued at £1,626,000 showing a capital loss of £374,000.
I understand that as a result of revised accounting rules, these losses will need to be provided for next year.
Meanwhile there are bright spots on the horizon (spoiler alert: sarcasm) I am reminded that Babergh and Mid Suffolk are passionate about enabling our communities to be more sustainable, resilient and to thrive.
Doubtless this is why we are advertising the post of Director of Place at a salary of £85,102 – £97,879. His/her responsibilities include bringing together responsibility for our key levers of planning, communities, wellbeing and the economy. You’d think that this was the job of the Chief Executive and that the last thing we needed was another £100,000+ (including national insurance and pension contributions) of overhead.
But the position is being advertised and I wonder who in the present circumstances thought that this was a good idea.
Disclaimer:
This blog/post is the sole responsibility of its author Brian Riley.
It has not been approved nor is it endorsed by Babergh District Council or South Suffolk Conservative Association.