Agenda item

1.    To approve the launch of the Hammersmith & Fulham green local authority security from November 2023, up to a maximum total value of £5m.

2.    To delegate approval for the specific climate initiatives to be funded from the green local authority security (up to a maximum of £5m) to the Strategic Director of Environment, in consultation with the Cabinet Member for Finance and Reform, the Cabinet Member for Climate Change and Ecology and the Strategic Director of Finance.

3.    To contract with Abundance Investment Ltd for the management and administration of the community loans, for the duration of the five-year loan period (estimated contract value of £100,000).

Councillor Ree introduced the report requesting approval for the launch of a green local authority security, enabling the Council to finance green initiatives from community investment. This was a loan from the community, allowing residents, local businesses, and anyone else to invest in H&F’s climate change objectives They were targeting a loan amount of up to £5m, the highest value green local authority security ever issued by a local authority. These were fixed rate loans, with interest rates set by the Council.

Councillor Ree added that following the updated Treasury Management Strategy Statement at Full Council on 1 November there had been a couple of changes to the published report to provide more clarity on the nature of the investment. The word “bond” was replaced with “local authority security” and the word “return” with “a low-risk investment with a fixed return”, reflecting the correct terminology.

Councillor Wesley Harcourt added that the funds raised would be invested in green initiatives, including decarbonisation of the Council’s corporate property portfolio (such as heat pumps, solar panels, electric vehicle charging points etc). The Council was working towards targeting net zero carbon and dealing with climate change, which required significant investment to achieve. A green local authority security was an effective way to finance some of the required investment .

Councillor Andrew Dinsmore noted that the interest rate would be set by the Council, fixed at above inflation rates, and asked whether any of the projects would lead to a return in capital that funded the interest paid back to the investors, and if not, how the Council would fund those levels of returns.

Councillor Ree replied that this would be a fixed rate 5-year local authority security not tied to the current inflation rates. The Council would benchmark interest rates at below that of the Public Works Loans Board (PWLB), therefore representing a cheaper means of external borrowing for the Council, compared to external borrowing via PWLB. The Council’s loan facilitator, Abundance Investment Ltd, would charge a small fee for their administration services, which would be deducted from the final rate offered to investors. The £5m would go directly to fund all the projects with no need to raise additional money.

Councillor Ree added that those projects were not meant to raise money but to invest in works that the Council would need to carry out to mitigate the effects of climate change. The returns to investors would come from the 4-year Capital project plan, approved by the Council.

AGREED UNANIMOUSLY BY THE CABINET MEMBERS:

1.    To approve the launch of the Hammersmith & Fulham green local authority security from November 2023, up to a maximum total value of £5m.

2.    To delegate approval for the specific climate initiatives to be funded from the green local authority security (up to a maximum of £5m) to the Strategic Director of Environment, in consultation with the Cabinet Member for Finance and Reform, the Cabinet Member for Climate Change and Ecology and the Strategic Director of Finance.

3.    To contract with Abundance Investment Ltd for the management and administration of the community loans, for the duration of the five-year loan period (estimated contract value of £100,000).