Fed up with bankers? Think that everyone in the City is trying to shaft us? So did I until today went I spent most of the day with CCLA. If you have not heard of them but are connected with local government, charities or churches you should have done. CCLA stand for Churches, Charities and Local Authorities and is an organisation that invests funds on behalf of the three sectors.
It is full of people experienced in running funds, complying with FSA and other regulations and investing money safely and productively in a variety of cash and equity funds. The really nice thing about CCLA is that it is effectively a mutual on behalf of the three sectors. Put another way it is a none profit making social enterprise which has been established by the three sectors to provide value for money ways of investing for the short, medium and long terms.
To be honest I hadn’t heard about it until this time last year when I bumped into CCLA at an awards ceremony which they were helping to sponsor. I suppose it’s hardly surprising that as a councillor I haven’t heard much about them because they are not an organsiation that most of our advisers want to tell us about because they don’t pay fat fees or commissions – they do, however, make good returns for the three sectors.
Traditionally CCLA has run LAMIT the Local Authorities’ Mutual Fund which has a good property portfolio. It has £74million invested on behalf of 14 authorities and is making an estimated return last year per unit of 17.4% – not bad in current circumstances and about 5% more than the PUT index for the same period. It secures a good return by aggregating the investment power of those councils and then professionally manages the assets alongside similarly property funds for charities and churches.
It wants to run another fund, this time a cash fund (the Public Sector Deposit Fund), which will enable councils to get a good return on investment for their cash be it on a one day, seven day or longer term basis. Again it will achieve this by pooling resources and getting better rates from the banks by dealing with larger sums than most individual councils can do. This is particularly important as most councils have become incredibly risk averse after the Icelandic banking problems. Some councils are getting no return at all for the cash and just have it sitting there.
CCLA will launch the cash fund on 25th May and I hope that I will find your council as one of its initial backers as there are extra costs savings that will be given to the initial seed corn depositors.
CCLA handles accounts with just a few thousands in them from small churches and charities to more substantial funds from bigger charities and councils so if you are none profit making it is almost certain that they will have an account that is suitable for your organisation.
It will also give the local council sector another argument against the incomprehensible drivel that Pickles is talking about reserves and balances. We know that we have to keep short, medium and long term funds for a variety of reasons. Investing it to give good returns whilst we hold them via the CCLA vehicle is a good way to try and show Eric that we do invest well and that these balances and reserves are not wasted money hanging around doing nothing.
If you want to know more about CCLA generally go on their website at http://www.ccla.co.uk where there are also details about the Public Sector Deposit Fund or drop an e-mail to Andrew.firstname.lastname@example.org who will be pleased to respond to your queries.