Jenny Wadham, Principal Accountant at Hampshire presented an update report on the financial position of the Thames Basin Heaths Strategic Access Management and Monitoring (SAMM).
As at 31 March 2015, the Endowment Account balance had stood at £1.820m, and an additional £430,340 had been held in the Maintenance Account to pay for project expenditure. It had been projected that a further £790,000 would be added to the Endowment Account in the 2015/16 financial year, giving an anticipated total of £2.610m available to be invested. Based on current projections of income and expenditure, the balance on the Endowment Account would increase to £4.780m by 31 March 2018.
The total income received by the Administrative Body to 31 March 2015 had been £2.911m, set against amounts paid out to cover costs of £660,338. The actual tariff income received in the year to 31 March 2015 had been £1.402m, which had been significantly higher than the forecast income.
The Partnership received details of the actual project costs for 2014/15, and a detailed breakdown of the projected project costs for future years.
Full information on the projections for the 2015/16 financial year and budgets and plans for 2016/17 onwards would be covered in the update from Natural England. However overall it was projected that approximately £790,000 would be added to the Endowment Fund. The projected costs for 2015/16 equated to 27% of the total tariff income, and a net increase to the Maintenance Account balance of just under £33,000 was projected.
In the SAMM business plan it had been envisaged that approximately £1.6m annual tariff income would be required, to meet the ongoing annual expenditure costs, whilst allowing for 70% of total income to be transferred to the Endowment Fund, to ensure the sustainability of the SAMM in perpetuity. It was noted that the projected tariff income for the 2016/17 and 2017/18 financial years was approximately £1.4m and £1.7m respectively.
The annual expenditure projections on an ongoing basis were approximately £427,000, following planned recruitment to four full time and ten seasonal wardens by March 2016, as agreed by the JSPB at the meeting on 18th December 2013. The ongoing annual expenditure projections were slightly lower than the level originally anticipated in the SAMM business plan of approximately £500,000 per annum, primarily because the full allocation of wardens had not been met. The four full time wardens were now in post, and the full ten seasonal wardens were planned to be in post for 2016/17.
The JSPB was reminded that under the terms of the SAMM agreement it had responsibility to review the value and performance of the Endowment Account on a regular basis. The agreement also envisaged that the management of the funds in the Endowment Account would be undertaken by an Independent Financial Advisor.
As a result the JSPB was asked to provide direction as to how and from whom the services of an independent financial advisor were to be procured in order to maximise the return achieved. It was noted that fund balances were currently held by the Administrative Body, receiving interest at a rate of 0.5%, the current Bank of England base rate.
The JSPB discussed the need to obtain a better return on the funds in the Endowment Account and the approach to appointing an independent financial advisor, as Hampshire County Council was unable to provide this advice. It was proposed that preliminary work be undertaken in relation to the appointment of an independent financial advisor and the results reported to an additional meeting if necessary. Members also requested clarification on the Terms of Reference and contractual arrangements of the JSPB.
(a) the current financial position and projected financial position for the three financial years to 31 March 2018 be noted;
(b) the transfer of any unused Maintenance Account balance to the Endowment Account was considered;
(c) the investment strategy for the Endowment Account fund was considered;
(d) Hampshire County Council be asked to undertake preliminary work in relation to the appointment of an independent financial advisor;
(e) if necessary, an additional meeting be arranged to consider the appointment of an independent financial advisor; and
(f) information on the Terms of Reference and contractual arrangements be circulated to Members.