Issue - meetings

RESOLVED – that (A) the policy principles for property investment as detailed in Section 3 of the report now submitted, be approved;

(B)     the draft outline of the timetable for action be noted and that a further progress report be submitted to a future Executive meeting; and

(C)    the requirement for additional resources to support the development of this policy that will be funded from the 2013/14 planning contingency be noted.

The Executive Member for Finance submitted a report recommending a set of principles for developing an Investment Strategy for East Herts.  This would seek to address the need to identify new and additional sources of revenue income over the medium to long term, given the context of reducing revenue streams from traditional sources including Government grants.

The Executive Member explained that having taken early expert advice, the proposition was that East Herts should develop a balanced portfolio which provided a spread of cash and property based investments which would optimise income in the context of a balanced approach to risk.  This report would pave the way to take more detailed technical advice once policy decisions became clearer.

The Executive was reminded that East Herts currently had in excess of £60m capital available for investment, the majority of which was currently in short-term money markets.  Initial thoughts were that a balanced portfolio should be developed across the following 3 areas:

·                        continued investment in the money market;

·                        investment in property funds; and

·                        investment in the purchase of private housing or commercial property potentially through joint venture activities with third parties.

The Executive Member stressed the need to improve investment performance and detailed the policy principles in the report now submitted.  

Councillor J Thornton questioned the value of making direct investments in commercial properties and suggested that the risks would outweigh the return.  He also referred to the care needed in identifying the expert advice needed.

Councillor J Wing asked if the level of investment return sought had been defined as this would help understand the level of risk involved.  He also asked to what extent the positive impact on the District and immediate neighbouring areas would be a factor in making investment decisions.

The Executive Member accepted the points made by Members as valid considerations that needed to be made.  He stressed that the purpose was to improve investment performance and that careful consideration needed to be given before any decisions were made in order to avoid the pitfalls.  He was looking to achieve a 5 – 7% return over the long term, if the appropriate governance arrangements were in place.  The management of investments would be one of the issues that would need careful consideration.

The Executive approved the recommendations now detailed.

RESOLVED – that (A) the policy principles for property investment as detailed in Section 3 of the report now submitted, be approved;

(B)      the draft outline of the timetable for action be noted and that a further progress report be submitted to a future Executive meeting; and

(C)      the requirement for additional resources to support the development of this policy that will be funded from the 2013/14 planning contingency be noted.