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WHATS WODC DOING WITH OUR MONEY
The glossy WODC newsletter "Creating Futures" - produced by local spin doctors and carrying only good news - was delivered to us all last week. It says "The Council has been hit hard by current low rates of interest". Well yes, but that's not the whole story.
WODC have around 60m of our cash sitting in their coffers. It is invested in safe gilts and bonds (Nothing to do with risky equities) The original budget estimate of investment income for 2003/4 was 2.613 m. The current forecast is 2.141m (nearly half a million down). WODC use two fund managers to invest the 60m. One of them Investec who handles 30m (half the total) invests in Gilts and achieved a rate of return in the six months April-October 2003 of only 1.81%. (Hey I get more than that from my building society!). The other fund manager Traditional invests in cash and achieved twice the rate - 3.75%. If all our money had returned the higher rate my arithmetic makes that an extra 582,000 in a full year. Now I don't know anybody who wasn't forecasting that returns on gilts would fall this year as equities recovered and interest rates went up. Perhaps the WODC need to be a bit faster on their feet. (Shouldn't the Best Value Committee be looking at this) The Council is now looking for cost savings of 600,000. Probably a co-incidence - but it looks a bit as if we are now being asked to pay for their lousy investment strategy. (Now that is ONE strategy we really do need! - ED) Some District Councils have invested directly in commercial property but when WODC were asked about this at a recent Forum in Chippy we were told that it was considered too risky. Commercial property Fund Values have risen by 7% in the last year.(And by the way while we are talking about financial management we notice in some recent WODC minutes.... "Currently the Cogges museum is operating at an operating deficit of over 200,000 compared to a deficit of around 110,000 when the district council took over the running of the museum from the county council 5 years ago")
Read District Councillor Epp's comments on this in the