To consider a report from the Executive Member for Economy and Regeneration and the Corporate Director of Place.

The Leader introduced the report that was circulated as part of the agenda. The Committee were asked to note that it was a concise report which accompanied the latest version of the strategy. The strategy gave a facility for up to £500M but informed the Committee that the Council was currently investing £330M so had a large amount of available capital to invest. The strategy had delivered over £4M in returns during the year despite it coming under projections by £2M.

Councillor Procter welcomed the impact of the strategy and asked whether there was a greater level of due diligence on developments outside of Trafford and GM. The Leader welcomed the question and handed over to the Corporate Director of place to provide an answer. The Corporate Director of Place asked Members to note that the Strategy had changed over the years to have a focus upon local investments and the focus of the due diligence was upon mitigating risks to the Council. The Council no longer looked at investments outside of GM and attempted to invest as much within Trafford as possible. The Corporate Director of Place assured the Committee that extensive due diligence was carried out prior to any investment wherever it was situated.

Councillor Winstanley asked about the risk reserve, which was being used to meet the shortfall this year, and what level of risk reserve would be of concern. The Leader responded to Councillor Winstanley that the Council had been conservative in their approach since the fund had been created and had built up a large risk reserve and the amount during the year was not a cause for concern.  The Corporate Director of Place added that the risk reserve was different to other reserves as it linked directly to investments, so it was easier to calculate the risk and level of reserve needed. The Committee were informed that the Council continuously reviewed the risk of the investments and the Corporate Director explained how funds were allocated to the reserve to ensure risk to the Council was minimal.

Councillor Carter asked how the Council increased the level of property development. In response to Councillor Carter the Leader explained the way that the Council identified and invested in opportunities and that the Council took a low-risk approach to investment.

Councillor Carter asked whether Trafford could be benchmarked against other authorities. The Leader responded that the Council was not benchmarked against other authorities although he would be interested in doing so, especially against authorities who had gotten into financial difficulty due to investments to avoid the same pitfalls. The Corporate Director added that due to the changes to the rules of how Councils were able to invest it was difficult to benchmark with other authorities as many had investments which were no longer permissible.

Councillor Carter asked whether the Council were able to invest in projects to help with the climate change priorities. In response to Councillor Carter the Leader stated that the Council did look for investments that would help meet the Council’s climate change priorities and that the reports on potential investments did provide information on the environmental impacts of the development.  The Corporate Director of Place added that the Council looked for opportunities but had to compete with other investors, could not undercut the market, and had to invest within the investment strategies parameters regarding risk and rates of return. The Committee were asked to note that the Investment Management Board did not get involved with projects until after planning permission for a development had been granted to avoid conflicts of interest. This limited the influence the Council could have upon developments, but they did try to encourage developers to maximise their green efforts.

Councillor Coggins recommended CIPFA training to get an understanding of the investments made by Council’s. The training provided tools for comparing your Council’s investments with what the Councils who had struggled had done. Councillor Coggins noted the success of the investment programme but stated that she felt that Councils should not have to do this type of work to generate revenue.

The Leader agreed with the points raised by Councillor Coggins and noted that the authorities that had gone bust had a lack of challenge and he assured the Committee that was not the case in Trafford. The Leader agreed that the Council should not have to do this to bring in income but that it was delivering a large amount of regeneration into the area and he hoped that would continue.

Councillor Walsh asked whether the Council ever looked to providers other than CBRE for advice. The Corporate Director of Place responded that the Council were currently going through a tender process for an investment advisor.

Councillor Walsh asked whether social value was considered as part of the investments. The Corporate Director of Place responded to Councillor Walsh that social value was taken into consideration, especially in terms of the wider impact of potential regeneration in the area.

Councillor Walsh asked whether Stockport had a similar approach to Trafford. The Corporate Director of Place Responded that Stockport had a different structure of how they managed their investments so while they carried out similar investment activity it fell within their main budget rather than a separate structure.

Councillor Butt asked whether there was a risk register for the strategy. In response to Councillor Butt the Corporate Director of place informed the Committee that the investment management fund was captured on the strategic risk register and there was a risk assessment for each development. As the information within those risk assessments was commercially sensitive it had not been shared as part of the report.

The Chair welcomed the report and noted how well it was written. Due to the size of the investment fund the Chair felt that the Committee should receive regular updates on how it was performing. The Corporate Director of Place responded that regular reports were made to the Accounts and Audit Committee, which could be shared with Committee Members, and that Members always had opportunity to scrutinise the strategy during the budget scrutiny process each year. The Corporate Director of Place Expressed that he would like to provide some reports to the Committee which focused upon the outputs of the strategy. The Corporate Director of Place noted the Chair’s comments regarding the quality of the report and informed the Committee that was due to the work of the Council’s Finance Manager. The Leader added that he was happy to bring further reports to Scrutiny and that he welcomed the challenge they provided.

RESOLVED: That the report be noted.