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EHDC is GAMBLING with public money - Trevor Maroney (14th Dec 2017  12:21:37) EHDC are holding a council meeting at 6.30 pm this evening. They have TODAY added an item to the agenda which we, as council tax payers, should have been made aware of some time ago. To save you looking it up the motion reads as follows: [note] Borrowing for investment purposes In February 2017 full Council approved the Council’s Treasury Management Policy and Prudential indicators, which provide the framework for an investment strategy, financed through borrowing, of £40m per year up to £200m over the life of the medium term financial strategy. In order to meet the Council’s investment property aspirations it is recommended to accelerate borrowing by removing the £40m per year limit, thereby permitting borrowing of up to £200m over the life of the Council’s medium term financial strategy. RECOMMENDED to full Council that: Authority be given to the Executive Director (Operations), in consultation with the Section 151 Officer, to borrow up to £200 million in order to meet the Council’s investment property aspirations. [/note] I didn't see anything in the Conservative manifesto during the district elections in 2015 stating that they intended to borrow these sort of sums. There has been no public consultation on creating this amount of debt. Is EHDC to become a property investment company in all but name? What about the need for more social housing? What has happened to open and transparent governance? Are we just going to let this happen without any time or forum for public debate? Is this what we voted for?

Re: EHDC is GAMBLING with public money - I (14th Dec 2017  12:35:32) Trump, oops I meant Trevor, are you really going to conduct your political campaign over the internet?

Re: EHDC is GAMBLING with public money - Rachel (14th Dec 2017  13:50:27) I, he has a valid point!

Re: EHDC is GAMBLING with public money - Richard (14th Dec 2017  14:19:05) Isn't there a standard piece of investment advice...don't spend what you can't afford to lose? Using some of existing reserves for this purpose may be suitable, as it improves the yield on the reserves, but borrowing money to speculate on property does seem a bit odd. If EHDC has funds to speculate on property, perhaps they should build some more houses themselves to alleviate housing shortages. This seems a far better use for scare resources.

Re: EHDC is GAMBLING with public money - Paul (14th Dec 2017  16:33:59) Why describe it as gambling? Sensationalist?

Re: EHDC is GAMBLING with public money - jim (15th Dec 2017  00:21:21) Paul: Because it is gambling. They are gambling that they will get a better yield from property than the interest they will have to pay on the borrowed money. If they are right then they will make a profit, but if property values and rents fall then they (we) will be saddled with a large debt with no means to pay it back. This type of speculation is exactly what the banks did that caused the crash when the investments they bought with borrowed money turned sour.

Re: EHDC is GAMBLING with public money - Iwik61 (15th Dec 2017  08:08:49) Have to agree shouldn't borrow to gamble.Do ehdc own the metro inn still on the a3 and that is still empty with no tenant.That worked as a investment .....not

Re: EHDC is GAMBLING with public money - liz (15th Dec 2017  08:46:37) Borrowing to invest is highly speculative and I would suggest a high risk strategy unsuitable for a local council. I wonder who at the council has the expertise to advise? In the last commodities price boom a large number of local councils were encouraged to invest part of their pension funds in commodities. Not looking so clever now.

Re: EHDC is GAMBLING with public money - Trevor Maroney (15th Dec 2017  15:28:38) You might like to read my report on last night's meeting when EHDC unanimously agreed to borrow £200 million to invest in UK wide properties to enhance their investment portfolio. Report on EHDC Full Council Meeting 14th December 2017 Item 12a – Borrowing [£200 m] for investment purposes V1.3 Introduction 1. I attended this meeting to see how open and transparent EHDC would be on this important issue of borrowing £200 m for its investment property portfolio. This is my report on what I saw and heard take place. 2. When I arrived, about 10 minutes early, I saw what I thought was the EHDC meeting taking place and tried to take a seat. I was immediately ushered out and told that it was a private meeting but not the subject matter. Main meeting 3. The public, all 4 of us, were invite in. There was no press present. The meeting was well run and the Chairman stuck rigidly to the agenda. All councillors seemed very subdued, more than usual. There was a very good verbal presentation from Georgina Shane of Two Saints, a homeless charity about their contract with HCC. This was followed by councillors nodding through all agenda items up to Item 12a with little or no debate. Item 12a - Motion to borrow £200 m 4. The Chairman reminded everyone on the rules of debate and invited someone to propose the motion on borrowing £200 m. I wasn’t certain who had put the motion forward and there seemed a reluctance from those present to speak on it. Cllr Cowper stepped forward and added 4 words “for identified and specified” before ‘investment property aspirations.’ With that change he proposed the motion. 5. Cllr Joy (Alton), who explained that he had missed the early meeting, asked if such property purchases would include or exclude those in Whitehill & Bordon (W&B). The Portfolio Holder said no, W&B weren’t included and said that he looked after the rest. Cllr Cowper corrected him stating that the £200 m would be used for UK wide investments. I took this to mean that it would not be spent solely for the benefit of East Hampshire businesses and residents, but used purely for the income it would generate from anywhere in the UK. I now understand, from speaking to Lib Dems in other authorities that many councils are doing the same by investing outside their boroughs or districts. I would have thought that any such funding would be better spent on addressing the acute shortage of social housing locally. 6. Cllr Evans (Horndean) asked if the existing annual limit of £40 m had been exceeded and was that why they were now looking to invest more. Cllr Cowper explained that the current £30 m property portfolio had been very successful creating a yield of 7.5%. He added that full risk assessments were applied to them all; he had conducted two of them personally. Also that they paid strict attention to detail compared with other councils. He was now asking for flexibility to buy larger investments. 7. To reinforce this argument, the Portfolio Holder added that the Council was competing in a highly competitive market against many other councils and had to make quick decisions when purchasing investments. Therefore he need cash immediately available. He added that each purchase was signed off by 7 members of the council. 8. Since there was very little debate, councillors seemed reluctant to say anything, I tried to ask a question as to what took place in the earlier meeting. The Chairman refused to allow me to speak. I later found out that under the rules on public questions (Standing Order 13.4 (e)) I needed to submit a written question 2 clear days in advance of the meeting; I only became aware of Item 12a along with many other members of the public on the day of the meeting. 9. The Chairman then read out the motion and it was nodded through with no real debate. Last Items 10. Item 13 on the agenda related to minutes of committee meetings which were collectively nodded through. The public were then asked to leave as they were holding an excluded session. Epilogue 11. After the meeting I made enquiries into: a. When the public were first made aware of the additional Item 12a. I am told that the supplement was published on the Council’s website at 8.53 am on Monday 11th December; I only became aware of it on Thursday morning. However, subscribers to EHDC’s mailing list only received notification of Thursday’s meeting taking place by email at 6:01:28 pm on Wednesday 13th December, far too late to submit written questions and, in most cases, attend the meeting. b. The pre-meeting. I am reliably informed that this was a Conservative group meeting not open to the public at which clearly items on the main meeting agenda must have been discussed and positions agreed.

Re: EHDC is GAMBLING with public money - Richard (15th Dec 2017  19:08:26) Trevor, thank you for your update after you attended the meeting. Mr Finch, as you are a counsellor, can you add anything to the narrative please?

Re: EHDC is GAMBLING with public money - lac (16th Dec 2017  21:12:56) I need to respond to this as I'm very uneasy about elected councillors using borrowed money to invest. Commercial property development is being piled into by all councils to fill their coffers.Given local governments (and national government) record in investing other peoples money in "money making" schemes I sincerely hope this venture does not end in tears. Given the need for affordable housing and the obvious advantages this provides socially and economically I'm puzzled why commercial investment is the way EHDC is moving forward, This "punt" is a commercial gamble. I presume all those who nodded it through will still be nodding if the investments go belly up. I'm willing to bet their own investments are not solely in commercial property ventures. Its easy to gamble with other peoples money - a feature many elected representatives seem to share.

Re: EHDC is GAMBLING with public money - Richard (17th Dec 2017  08:32:16) Mr Cowper, I owe you an apology, I got your your name wrong... I am also under the impression (but may be mistaken) that you contribute here. If that is the case, can you add to the narrative?

Re: EHDC is GAMBLING with public money - SteveA (17th Dec 2017  13:54:48) Hopefully they have some better advisors than the ones who persuaded them to invest in the Metro Inns Hotel on the A3. - altonpostgazette.co.uk/article.cfm?id=109581

Re: EHDC is GAMBLING with public money - liz (18th Dec 2017  12:09:04) Who is "the Portfolio Holder". Is this the investment manager and do we know his/her experience/track record?

Re: EHDC is GAMBLING with public money - Lucy (18th Dec 2017  17:50:05) I believe EHDC have set up a seperate private ltd company trading account for this with I believe one of the chief officers as investment decision maker. I think from memory it may be called EhDc trading ltd or something like it. The company meetings / decisions therefore do not have to be open to the public.

Re: EHDC is GAMBLING with public money - liz (19th Dec 2017  08:41:44) Thanks Lucy. It's quite worrying.

Re: EHDC is GAMBLING with public money - Jack (19th Dec 2017  10:29:39) Not sure if this is relevant: East Hampshire Trading Company - Incorporation Proposal It refers to a proposed company to allow EHDC to undertake commercial transactions. There is no such company currently shown on the Companies House register. I am not certain, but is the idea to attract private investment and make the limited liability company responsible for the debts (and therefore protect EHDC council tax payers)?

Re: EHDC is GAMBLING with public money - lucy (19th Dec 2017  16:59:19) Hi if they are attracting private investors there would be no need to get approval to borrow money? Also I believe it is taxpayers money being used.

Re: EHDC is GAMBLING with public money - Iwik61 (19th Dec 2017  17:39:13) This is the same Steve Pearce who approved the building of three Eco houses at bordon fire station at a cost of 750k ,wifi in bordon, bus shelters that were self lighting ,600k on the bordon community piazza ,20k on the mill chase fitness route soon to be scrapped when mill chase moves ....certainly more than enough qualified in my opinion !!!!!

Re: EHDC is GAMBLING with public money - H (27th Dec 2017  10:23:58) It is no surprise that the EHDC cabinet were asked to approve this, there is a government move to end borrowing by local councils for just this purpose. In the Times today, there is an article about this very subject, and there is a public consultation paper, upon which one can comment, but as EHDC have already gone down the road of voting this through it may be too late for anyone to stop them, they obviously have had problems with other councils who have also borrowed in this fashion. The government consultation will be on line please give your views.

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