Agenda item

To receive a report providing an update on the work of the Investment Working Group.

The Board received a report providing an update on the work of the JSPB’s Investment Working Group. 

The Board was reminded that because it was not a separate legal entity any investments approved by the JSPB were in actuality made by Hampshire County Council in its capacity as the Administrative Body.

At the Board’s meetings in December 2020 and December 2021 it had been agreed that a further £3.2million and £2.5million respectively was to be invested, with the investments being made as soon as reasonably possible. It was reported that due to unexpected delays in opening a new account with one of the selected investment funds (CCLA Diversified Income Fund) the December 2020 investments had been delayed.  Subsequent changes to the Prudential Code (which prevented Council from accessing external borrowing from the Public Works Loan Board if they were investing for commercial returns) in December 2021 had resulted in further delays as Hampshire County Council sought to assure themselves that these changes did not impact its borrowing eligibility due to investments held or due to be made.  It was noted that it was expected that the £5.7million of investments would now be made by the end of July 2022.

The Board was reminded that Arlingclose had been contracted to provide financial advice to the Board on a rolling twelve monthly contract.  If the Board was minded to terminate this contract then notice had to be given to Arlingclose by September each year for the contract to end in the December.  It was agreed that the advice given to date had been positive and that the contract should be allowed to continue to run for a further twelve month period.

It was clarified that the Responsible Investing Policy developed by the Working Group had been based on the Royal Berkshire Pension Fund’s Responsible Investment Policy.  The Board’s Responsible Investment Policy was currently in the process of being reviewed; as part of this review Arlingclose would be asked to ensure that the policy was deliverable before it was shared with the wider Board for comment.  Concerns about the definition of Environmental, Social and Governance factors used in the policy were noted and it was agreed that this would be followed up outside the meeting.

It was noted that a third member of the Working Group was required and it was agreed that Councillor D’Arcy, Waverley Borough Council, would be appointed to the vacancy.

RESOLVED that:

      i.        Councillor D’Arcy be appointed to the Investment Working Group.

     ii.        The Investment Strategy, set out in Appendix 1 of the report, be noted.

    iii.        The Responsible Investing Policy, set out in Appendix 2 of the report, be noted

   iv.        The annual timescales for terminating the contract with Arlingclose be noted.

     v.        The amounts available for investment as set out in Table 3 and the projected cash flow scenarios set out in Appendix 3 be noted

   vi.        The requirements and practical implications, specifically outlined in paragraphs 39-46 of the report, surrounding any investment decisions made by the JSPB before any investments can be made by the Administrative Body on behalf of the JSPB be noted.