Agenda item

Consider report by Chief Financial Officer (copy attached).

There had been circulated copies of a report by the Chief Financial Officer providing the details of income and expenditure for the Selkirk Common Good Fund for the six months to 31 December 2016, full year projected out-turn for 2016/17 and projected balance sheet values as at 31 March 2017. Senior Finance Officer, John Yallop, highlighted the main points of the report and appendices.  Appendix I to the report provided a projected income and expenditure position.  This showed a projected surplus of £16,505 for the year.  Appendix 2 to the report provided a projected Balance Sheet to 31 March 2017.  It showed a projected decrease in the reserves of £59,853 due mainly to the further investment in the Newton Fund. A breakdown of the property portfolio showing projected rental income for 2016/17 and actual property expenditure to 31 December 2016 was detailed in Appendix 3 to the report.  In response to a question about actual property expenditure, Mr Curtis, detailed property repair costs still to come from the 2016/17 budget in relation to fencing completed on the boundary of Smedheugh and South Common Farms and drainage work at South Common.  The Chairman had been approached by the tenant of Linglie Farm, regarding a stretch of fencing required to complete a length of fencing which had been partially grant-funded and asked Mr Curtis to look into this as soon as possible.  With regard to grants and donations, Mr Yallop advised that there was approximately £4k remaining in the budget once all approved grants had been paid.  In terms of the performance of the Newton Investment, detailed in Appendix 4 to the report, Mr Yallop advised that over the quarter to 31 December 2016 the Newton Real Return fund was estimated to have delivered a negative return of 4.8% against its benchmark of +1.1%.  The report explained how this had been the result of the make-up of the cautiously positioned portfolio. Although this had to an extent negated its annual performance, the Fund was estimated to exceed its target return of 4.5%, by returning 4.8% for the year.  KPMG had been commissioned by the Council to assess the Fund’s performance against its peers offering similar diversified growth funds.  Although information on quarter 4 was not yet fully available the assessment confirmed that the Fund had performed well in the long term against its peers.  Mr Yallop advised that Newton’s performance against benchmark and against its direct competitors would be monitored.  In addition, a visit to their offices in London had been arranged by officers to discuss the Fund’s current performance and outlook for the future.

DECISION

(a)        AGREED the projected income and expenditure for 2016/17 shown in Appendix 1 to the report as the revised budget for 2016/17;

(b)       NOTED:-

(i)            the projected Balance Sheet value to 31 March 2017 in Appendix 2 to the report;

(ii)          the summary of the property portfolio in Appendix 3 to the report; and

(iii)         the current position of the investment in the Newton Fund in Appendix 4 to the report.

(c)        AGREED that, with regard to expenditure on property repairs, the Estates Strategy Surveyor follow-up as soon as possible the request for a length of fencing to be erected on Linglie Farm.