Common Good and Trust Funds

New investment strategy approved.

We have agreed to an investment strategy and associated recommendations relating to the Common Good and Trust Funds with the aim of improving long-term capital and income growth.  The strategy, recently approved by the Council, seeks to maintain the real value of investments and provide common good funds with income from a broad range of investments over the long term.

The investment strategy and recommendations agreed will ensure that common good and trust funds retain their individual identities while being managed and overseen by the Council's working groups.  There will be no changes to local member involvement and no loss of identity for each of the common good funds.

The agreed investment strategy and associated recommendations apply to the management of surplus capital cash balances and investments of the funds and do not affect the arrangements for the management of revenue cash balances, property or the disbursement of grants.

There has been increasing pressure to address the significant decrease in income generated from common good cash balances following the financial crisis in 2008 which has resulted in the bank base rate reducing to 0.5%pa.  The anticipated benefits of a single investment strategy offer scope for efficiencies, economies of scale and other cost savings.  It will also potentially open up the opportunity to those funds currently only investing in cash to achieve benefits through long term capital growth.