text: Agenda item - Investment Working Group
  Meeting of Thames Basin Heaths Joint Strategic Partnership Board, Thursday, 19th November, 2020 10.00 am (Item 6.)
  To consider a report providing an update on the work of the Board's Investment Working Group.
  The Board received a report providing an update on the work of the Investment Working Group and the JSPB's Investment Strategy.
  The Board was informed that the Investment Working Group had been established to review and recommend appropriate policies and actions to the JSPB in respect of matters relevant to managing the JSPB's investments. The Investment Working Group's membership was currently made up of three members (Councillor Jonathan Glen, Hampshire County Council, Councillor David Hilton, Royal Borough of Windsor and Maidenhead and Councillor Natalie Bramhall, Surrey County Council); support was provided by Jennifer Wadham, Principal Accountant, Hampshire County Council in relation to Hampshire County Council's role as Administrative Body (A role which does not include providing investment advice to the JSPB).
  The Board was reminded that the Investment Strategy had been developed using the following key principles:
  · Annual expenditure needing to be funded was expected to be in the region of £500,000 rising with inflation
  · A balance of £1million should be kept in the Maintenance Fund (This equates to two years of expected running costs)
  · Risk should be kept as low as possible whilst ensuring it was sufficient to meet the expected expenditure i.e. a sensible risk.
  · A target return of 2-3% above inflation was considered to be appropriate
  · The interest paid on cash balances held by the Administrative Body (Currently 0.1%) was unlikely to be sufficient to meet the target return.
  It was noted that the Covid-19 pandemic had added a level of uncertainty to the rate of house building and this would have implications for the tariff income and the Endowment Fund. Currently this risk was mitigated by holding the balance of the Maintenance Fund at £1million; to mitigate these risks further it was proposed that the Maintenance Fund balance be increased to £1.5million.
  It was noted that Arlingclose, had been appointed by the Board to provide independent financial advice to the Board. The contract with Arlingclose began on 1st December 2018 and was renewed annually on a rolling basis. Notice to terminate the contract had to be given in writing at least three months in advance of the contract renewal date (i.e. by 1st September each year).
  It was noted that investment decisions were to be made by the JSPB and all risks associated with these investments, including any risks associated with the accounting standard IFRS9, rested solely with the JSPB.
  The Board noted the JSPB Investment Strategy and agreed that paragraph seven of the strategy would be reviewed by the Investment Working Group to better reflect the Board's view that investments should as far as possible be made in areas which did not have an undue negative impact on the environment.
  i. Subject to the inclusion of Councillor Jan Harwood, Guildford Borough Council as an additional working group member, the current membership of the Investment Working Group be approved.
  ii. The Investment Strategy, as set out at appendix 1 of the report and subject to the rewording of paragraph 7, be approved.
  iii. The balance of the maintenance Fund be increased from £1million to £1.5million.
  iv. The annual timescales for terminating the contract with Arlingclose be noted
  v. The amounts available for investment, as set out in Table 1, and the projected cash flow scenarios set out in Appendix 2 of the report, be noted.
  vi. The requirements, practical implications and limitations specifically outlined in paragraphs 38 to 46 of the report, surrounding any investment decisions made by the Joint Strategic partnership Board before any investments can be made by the Administrative Body on behalf of the Board be noted.