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Parish Council Investment Strategy

We help town and parish councils prepare the investment strategy required by the statutory guidance issued by the Secretary of State. A strategy is mandatory for councils with an investment balances over £1 million and is advised for those with over £100,000 to invest.

We provide a template covering all the mandatory content and best practice in the sector, then discuss the council specific details to build a strategy that works for you. You will end up with a document that is robust enough to limit the council’s risks, but not so narrow that you miss out on the available investment opportunities.

Risk management

The strategy will contain a two-pronged approach to credit risk management, with a counterparty selection policy to ensure your cash is kept safe, together with a sound diversification policy to limit any downside risks. This is particularly important for councils with budgets over £400,000 as they are excluded from the Financial Services Compensation Scheme and at risk of losing everything in a bank failure.

The strategy will also focus on managing liquidity risk – keeping enough cash available to spend – and interest rate risk – limiting the impact on rate cuts on your investment income.

The government’s investment guidance requires authorities to set and monitor a range of investment indicators. We will advise which indicators are most suitable given your investment strategy and help you to calculate them each quarter for onward reporting at a council meeting.

CIPFA Treasury Management Code

The latest 2018 edition of the statutory investment guidance requires local councils to apply the principles of the Treasury Management Code to their investment strategy. It is CIPFA’s view that the priority for treasury management is to protect capital rather than to maximise return. The avoidance of all risk is neither appropriate nor possible. However, a balance must be struck with a keen responsibility for public money. Arlingclose is committed to helping clients comply, and demonstrate their compliance, with the Code’s key recommendations.