Public reports pack PDF 3 MB - Blaby District Council

4. Forward Plan
This report has not been included in the last Forward Plan. It is a key
decision. Since the publication of the Forward Plan it has become apparent
that returns on investments held with Scottish Widows Investment Partnership
are diminishing and that there is a window of opportunity whereby the Council
can re-invest funds for a fixed term one year period at a more attractive rate of
interest. Therefore it is impracticable to defer the decision on this report until
after the operative date of the next Forward Plan on which it could appear.
Accordingly the General Exception Procedure contained in Part 4 Section 2
Paragraph 18 of the Constitution has been invoked to enable its
consideration. The Scrutiny Commissioners have been informed and public
notice has been given by posting it at the Council Offices.
5. Key Decision
5.1 Yes
6. Matters for Consideration
6.1 Introduction
Earlier this year the Cabinet Executive was presented with a report which
suggested a change in direction in relation to its long term external investment
fund with the Scottish Widows Investment Partnership (SWIP) and long term
borrowing plans.
Members, having considered the proposals set out in the report, approved the
following recommendations:
• to utilise a proportion of the funds currently held in the external
investment fund to reduce the Council’s exposure to current and
potential future borrowing costs.
• to also redirect a proportion of the monies held in the external
investment fund from short dated highly liquid financial instruments into
longer dated fixed rate financial instruments to achieve higher rates of
return.
6.2 Since then the Council has withdrawn a total of £2.8m from the SWIP fund as
follows:
• £1m in support of the initial deposit with Lloyds TSB in relation to the
Local Authority Mortgage Scheme.
• £1.8m to negate the need to take up long term borrowing through the
Public Works Loan Board (PWLB) to finance capital investment.
6.3 However, shortly after the Cabinet Executive’s approval was granted
investment rates with SWIP began to show signs of improvement and so
further withdrawals from the fund were put on temporary hold.
6.4 Over the first half of 2012/13 the SWIP fund has earned a rate of return of
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