Shropshire fire authority investments are safe, committee says

Shropshire and Wrekin Fire and Rescue Authority has £20.2 million invested externally, and a report for members showed more than a quarter of this is held by three English councils.

Head of finance Joanne Coadey pointed out that the authority has contracts with Shropshire Council to manage its investments, and said Cornwall, Hounslow and Thurrock authorities, which hold a total of £5.6 million, were all “deemed to be low-risk”.

If their credit rating changed, she added, the authority would be able to react “immediately”.

The leader of Northamptonshire County Council resigned in March 2018 and its finance portfolio holder was sacked. A government-appointed inspector has recommended the authority be abolished and replaced with two smaller ones.

Minutes of the fire authority’s strategy and resources committee’s September 12 meeting say: “Members expressed concern over investing with local authorities given that some have gone bankrupt and asked if treasury services were concerned about this at all.”

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At the next meeting of the committee, Ms Coadey said: “At the last meeting, members raised concerns about investing our finances in local authorities, given that some of them were struggling and, in the case of Northamptonshire, were in serious trouble.”

She pointed out the Shropshire Council was under contract to act as the fire authority’s treasury services provider. According to the council, she said, “it’s still deemed safe to lend to other local authorities”.

Ms Coadey said Shropshire Council was provided with a list of financially safe local authorities.

“As soon as they are deemed to be in difficulty, they are removed from it,” she said.

The Shropshire and Wrekin Fire and Rescue Authority’s strategy and resources committee was discussing a treasury review document co-authored by Ms Coadey, which told members the authority currently has £20.2 million invested externally.

Of this, the London Borough of Hounslow and Cornwall Council are lent £2 million each and Thurrock Council holds a further £1.6 million.

A further £8 million is invested in banks, £5 million in building societies and £1.6 million in the debt management office.

Councillor Paul Wynn asked how quickly the authority could change its investments, and whether any of them were “tied in”.

Ms Coadey said: “If a financial credit rating changed, you would receive an update to the rating schedule. It would happen immediately.”