News, Politics

Nottingham City Council asked for assurance that £350m in investments are ‘ethical’

By Joe Locker, Local Democracy Reporter

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There are calls for Nottingham City Council to provide more information on its hundreds of millions of pounds in investments so they can undergo ethical scrutiny.

The authority held £351.1m-worth of investments as of the end of March, up from £330.7m the year before.

The vast majority are in the banking sector, while £101m are in short-term, low-risk money market funds, and £9.9m are in the UK Government.

Investments, while not broken down into specifics, offer an average 4.77 per cent return on interest, council documents show.

It is common for local councils to put money into an investment portfolio to generate funding which can go back into its activities.

During a council audit committee meeting on Friday (June 27), the finance director, Stuart Fair, was asked whether the investments would be considered ethical and align with the council’s policies.

Cllr Adele Williams (Lab), who represents Sherwood, said all investments should have a “positive” impact, and “certainly not be negative”.

“Lots of us as councillors want to ensure our investments and money management is done in an ethical way and in keeping with the values that support the sorts of things Nottingham citizens would want us to support – given the support for addressing climate change and its impact on people right here in Nottingham,” she said.

“If we were to look at divestment from funds that might have a negative impact on climate change, or, for example, might be supporting the situation in Gaza – which is horrific and we have an obligation not to support that.

“We have got some of the banks heavily invested in areas I think lots of us would be uncomfortable about. I’m not saying divest now, but what is our room for manoeuvre there?”

Mr Fair said the council employs advisors to help make informed decisions on investments.

He said typical investments are six to 12 months in scope, and that the authority uses banks with decent ratings.

“We are very careful,” he said.

“Basically recommendations by advisors try to maximise return on an investment, but within a framework of safety and UK regulation.

“In terms of potential investments none of the banks operate outside the European zone.”

He said many banking investments are with German banks, before adding: “These banks are rated for their financial strength, and the link between financial strength and the risks they take. Usually they are very safe and do not really invest in high risk ventures, and [where] countries are politically unstable.”

Cllr Williams requested a list of investments be provided at a future meeting of the audit committee.