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Council accused of ‘pleading poverty’ while investing £21m in bonds

30 Jan 2024 3 minute read
Caerphilly Castle. Photo by Michel Curi, licensed under CC BY 2.0

Nicholas Thomas Local Democracy Reporter

A Welsh council has raised eyebrows by investing millions in government bonds at the same time it allegedly “pleads poverty” in its budget proposals.

Plaid Cymru councillors have questioned how, and why, Caerphilly County Council could afford to enter a total of £21m in various investment schemes in recent months, yet propose a 6.9% council tax bill rise for residents.

“I fully accept that our investments bring in revenue,” Plaid councillor Gary Enright said. “But these investments are long-term financial commitments, which in the current state and climate is, in my opinion, financial negligence. This council has a duty to protect the public purse.”

“Fully compliant”

The local authority has defended the investments, arguing they were previously approved by full council and are “fully compliant” with regulations.

Eluned Stenner, the cabinet member for finance, said returns from investments “make an important contribution to the council’s finances and support the wider revenue budget and delivery of services”.

Plaid, however, argues the multi-million-pound investment is difficult to reconcile with cabinet members’ statements about the council’s financial pressures.

The draft budget proposals for 2024/25, which are currently out for consultation, show Caerphilly Council is anticipating a £46m funding shortfall over the next two years.

Cuts

As a result, a raft of cuts and reforms have been proposed, as well as a 6.9% council tax rise.

Plaid councillor Colin Mann said residents were “being asked to dig even deeper into their pockets”.

“Are residents being misled?” he asked. “What sort of organisation pleads poverty whilst at the same time investing huge sums of money in long-term investments?

“People have said to me that they feel that the council is taking money under false pretences.”

“In light that the council needs to save £46.7m, what would you rather do with that £21m plus? Cllr Enright added. “I’m all for saving but I come back to the council as an organisation that is overly reliant on saving too much of the money we have.”

Controversy

He said the impact of the budget shortfall could be seen through the controversial proposal to shut the Coffi Vista site, which critics argue also serves as a valuable community space.

Cllr Stenner, however, said the money invested had come from reserves “earmarked for specific purposes” and surplus balances arising “due to fluctuations in daily cash flows”.

“None of the £21m increase in investments between 31 March, 2023 and 30 September, 2023 was in long-term investments or gilts,” she added.

“All the funds invested during this period will mature during the 2024 calendar year. As already indicated, investment balances change frequently and total investments are currently £162m.”


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Bob
Bob
23 days ago

We’re the Labour party in the Valleys – we like what we say and we do what we bloody well like.

Mike
Mike
22 days ago
Reply to  Bob

More like a Russian communist dictatorship

Kathleen
Kathleen
23 days ago

The fact that they are facing a shortfall now proves that their past investments failed to bring in a credible return.

Linda Jones
Linda Jones
23 days ago

Yet more incompetence from politicians, thank goodness for Plaid exposing the Labour council

Bob
Bob
21 days ago
Reply to  Linda Jones

Linda jones totally agree with you on this one, now we all know why our council tax is going up by 6.9% this year to cover the 21million our Labour run cabinet as just thrown away

William Robson
William Robson
23 days ago

Cowboys

Craig
Craig
22 days ago

In Wales the money is being drained, our roads are a disgrace, derelict buildings falling to bits, empy shops. What the hell has happened to this country

Bob
Bob
22 days ago

Just like the 15million pounds they invested in the Icelandic bank that the people of Caerphilly new nothing about, Labour ran cabinet corrupt from top to bottom all corbinites

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