Public Finance Award received for financial management in Bromley
Published Tuesday, 5 October 2021
The national recognised Public Finance Awards have seen Bromley Council receive the Excellence in Asset Management Award in acknowledgement of robust treasury management and the strong performance of the council’s pension fund.
To support key services, including for the most vulnerable, the council produces annual investment income which comes from the strategy of pursuing property investments and other rent income alongside alternative treasury management arrangements. Bromley’s financial management strategy has produced net interest earnings of 2 percent, compared with the bank base rate of 0.1 percent which would have been expected from the standard practice of holding resources in fixed term deposits available from banks, building societies or other local authorities. The council’s property fund has seen £100m of investment without incurring any borrowing, which generates the equivalent of more than £5m a year.
Councillor Graham Arthur, Executive Member for Resources, Commissioning and Contracts Management, said: “I am delighted that council services can benefit from the financial position our investment strategy and pension fund performance has produced. The unprecedented times over the last two years have been extremely challenging for services and our asset management has been crucial for ensuring these services have the resources needed to continue to provide for Bromley residents. I am pleased that Bromley’s sound financial management has been recognised through this award and I would like to thank the finance team and staff across the council for their ongoing efforts in ensuring Bromley’s financial situation continues to be a success.”
The outstanding performance of the pension fund has reduced the council’s general fund costs by at least £6m per year and the net annual return in 2020/21 was 34.1 percent, which would be one of the top performers in the country. This performance has resulted in the overall pension fund being “fully funded”.
In 2017, the council reviewed the pension fund (current value of £1.4bn) to reflect changing circumstances and address challenges such as moving towards a cash flow negative position. The resulting Pension Fund Asset Allocation Strategy has delivered exceptional performance, placing Bromley on benchmark rankings of first over three years and over 10, 20 and 30 years. The strategy is regularly reviewed to provide resources to meet liabilities and to reduce the cost to the council taxpayers.
Bromley Council have a history of success at the Public Finance Awards, having previously won the Pensions, Treasury and Asset Management award in 2019. The awards are judged by a panel of distinguished sector leaders who are looking for organisations and service that demonstrate excellence and originality within public finance.
Financial management is key to the council’s wider transformation programme. Bromley’s financial strategy is designed to support essential services given the council’s position of being low cost and low-grant funded and having below-average council tax income. As such, the use of council assets is maximised to produce the required revenue, while managing risks and reducing pension costs.
For more information go to www.publicfinanceawards.co.uk
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