Stockport Council has around £38 million of investments and, on Tuesday, around a quarter of the councillors attended a training session from Stockport’s Treasury team – the people who manage all those investments.

Across the country,  all local authorities make investments of this type.  It isn’t money sitting around doing nothing.

Part of it is money the Council knows it’s going to have to spend, but it doesn’t need to do so yet.  For example, it knows its insurance premiums will be payable at the end of the year but, until they’re due, the money should be earning a return.

The other big chunk is for contingencies – unexpected costs like the bad weather we’re seeing now.  Just like the rest of us, it’s good sense for councils to have something put aside for a rainy (or snowy) day.

Stockport is, by general agreement, pretty good at this.  Top considerations for any investment is security of the loan and liquidity (our ability to get the money back when we need it).  After that is the rate of return on investments (which for Stockport is currently a healthy 3.15% overall – many councils are getting 0.25%or less).

All of Stockport’s investments are with top-rated institutions and the Council works with external advisors and other councils to keep a close eye on the markets.

So far, so good.

But a change in the Government regulations that came through  late last year means that, for the first time, councillors across the country need to be scrutinising their council’s investments far more closely.

Hence the training session – two hours after which my head was hurting quite a lot (clearly being an investment banker isn’t my natural profession).  From now on, Stockport’s catchily-named Corporate Resource Management & Governance Scrutiny Committee – of which I’m one of nine members representing all the political parties on the Council – will be receiving quarterly reports from the Treasury team and doing our best to check, challenge and adviseto keep the Council’s investment portfolio as healthy as possible.

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