DCN has responded to the Government’s consultation on capital risk metrics. In our response, DCN raised concerns about how these metrics will be used by central government and how they fit together as a set of metrics.
We said: “we have significant concerns that these metrics could be used as a way of ranking councils according to the level of debt they currently hold or the types of investments they have historically made. These indicators, whilst potentially useful to identify certain outlier councils, do not tell the full story and may not always accurately indicate whether any given council is in a detrimental position. In the DCN’s view, a council investment portfolio could be very well supported and diversified yet still fall foul of these metrics. It is vital that these metrics are used carefully and in conjunction with other information.”
We highlighted that the clear majority of district councils have borrowed and invested responsibly to support their ongoing spending and that the growing curtailment of the investment freedoms first introduced in 2010 now denies them the ability to generate income from making prudent commercial investments – in some case quite significantly.
You can read our full response by clicking here.