5 October 2009
Local Authority investors can maximise their returns through local investments, says Saffron BS
The collapse of the Icelandic Banks in 2008 was a costly event for many Local Authorities with invested funds, Saffron's Chief Executive Andy Golding believes that had local authorities stuck to investing in local building societies they could have achieved good returns and reduced risk.
He says: "Hindsight is a wonderful thing but recent experiences have proven the simple business model offered by building societies is successful in delivering sustainable and strong returns. The Local Authority move to offshore investing was made in pursuit of bigger returns, and it backfired, but there's no need to sacrifice returns for the sake of a safer investment".
"Local authorities and building societies have worked together for many years and now the time is right for that relationship to develop further. Regional building societies working with local authorities can deliver good returns and offer excellent risk management, plus they're united by similar principles; that the long-term good of the community is more important than making a 'quick buck'. This means that the building society, the local authority and the taxpayer can all be quids in"
Richard Bacon, MP for South Norfolk and member of the Public Accounts Committee said: "I appreciate that low returns from local authority investments will also impact on taxpayers, which is why local authorities need to find a secure home for investments that still deliver good returns".
"Building societies can offer this, and, by investing in building societies, local authorities are offering a real boost to the local economy while also supporting local employers who provide an important service to the community".
"For any local authority, investing in a local building society makes really good business sense as a strong relationship between building societies and local authorities benefits everyone. I would strongly encourage local authorities to talk to regional building societies so that they obtain good returns for taxpayers".
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