Item 6 - Investment Options for Alexander Cross Cameron Trust Fund Balance
West Dunbartonshire Council · 1 September 2025
Back to Alexander Cross Cameron Bequest Committee — 1 September 2025 and its agenda
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WEST DUNBARTONSHIRE COUNCIL Report by Chief Officer - Resources Alexander Cross Cameron Fund Committee 1 September 2025 _______________________________________________________________ Subject: Alexander Cross Cameron Trust Fund Balance and Investment 1. Purpose 1.1 The purpose of this report is to update Committee on Alexander Cross Cameron Trust Fund investments and recommend an approach for continuing investment. 2. Recommendations 2.1 Committee approves that £0.020m is invested with West Dunbartonshire Council in a variable rate account with the remainder of the Fund balance (currently £0.099m) to be invested with the Council in a 2-year fixed deposit account. 3. Background 3.1 On 14 February 2022, the Alexander Cross Cameron Committee agreed to invest £0.020m of the Trust Fund balance in a variable rate account with the remainder invested with West Dunbartonshire Council (the Council) in a 2-year fixed rate deposit account. Since its maturity date in February 2024, this loan has continued to be held within a fixed rate deposit account and as such consideration is required to be given to the future investment strategy. 3.2 The total value of the fund as at 31 March 2025, and the corresponding balances since 2022/23 are set out below: 2022/23 2023/24 2024/25 Short Term Investment with Council (working capital)* 14,485 £24,457 £17,421 Longer Term Investment with Council £103,020 £97,505 £101,523 Total Fund Balance (as at 31 March) £117,505 £121,962 £118,944 * £5,515 was transferred between long- and short-term investment at the start of 2023/24 in order to replenish the working capital to the target of £20,000. 3.3 Over the last three years, the Fund has paid out the following in grant awards: 2022/23 2023/24 2024/25 Grant Awards £6,200 £300 £6,000 Item 6
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4. Main Issues Investment Options 4.1 For comparison purposes, current borrowing/investment interest rates (as at 15 August 2025) with the Council are noted below. These rates track the bank interest rates and are therefore subject to change (and may change before the Committee makes the decision) Term Per Annum Short term variable/ 1 month fixed 4.05% 3 months fixed 4.10% 6 month fixed 4.10% 12 month fixed 4.15% 2 year fixed 4.58% 5 year fixed 4.85% 4.2 The Council’s treasury advisor, Mitsubishi UFJ Financial Group (MUFG), provided the interest rate forecasts set out in the table below. For information, ‘PWLB’ referenced is funding available to councils through the Bank of England, however for the purposes of the Fund, they indicate current projections for movements in interest rates in the short and longer term. These forecasts, as with other forecasts from various sources, should be considered with an element of caution. The forecast suggests there may be further future cuts in interest rates from December 2025 onwards. MUFG Corporate Markets Interest Rate View 10.02.25 Sep-25 Dec - 25 Mar - 26 Jun - 26 Sep - 26 BANK RATE 4.25 4.00 3.75 3.75 3.75 3 month ave earnings 4.30 4.00 3.80 3.80 3.50 6 month ave earnings 4.20 3.90 3.70 3.70 3.50 12 month ave earnings 4.20 3.90 3.70 3.70 3.50 5 yr PWLB 4.80 4.70 4.60 4.50 4.40 10 yr PWLB 5.10 5.00 4.90 4.80 4.70 25 yr PWLB 5.60 5.50 5.40 5.30 5.20 50 yr PWLB 5.30 5.20 5.10 5.00 4.90 4.3 Members should be aware, that while agreeing locking in an investment for a longer period of time may have short term benefits, there may be a detrimental longer term impact if interest rates increase during the fixed period. 4.4 Any investment strategy requires to ensure there is enough flexibility to change the strategy if required, due to unforeseen changes in circumstances, such as additional grant funding being paid out.
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4.5 The main options available to the Trust, and a comparison of the current investment interest gain on each option, are noted below: Option Rate Annual Interest per £100k Market lending to other local authorities/high street banks (those who meet an acceptable criteria): short term 4.10% £4,100 Lend to WD Council on a short/ medium or longer term fixed basis: 6 months 1 year 2 years 5 years 4.10% 4.15% 4.58% 4.85% £4,100 £4,150 £4,580 £4,850 4.6 The Committee is asked to approve that £20,000 be invested with the Council in a variable rate account, representing the Fund’s working capital. The value of the interest earned will be dependent upon the Fund balance as at 31 March 2026 and upon the level of grant awards approved in-year. This balance assumes that no more than £10,000 in grant awards is paid per annum. Committee is also asked to agree the remainder of the fund balance (£98,944) be invested with the Council for a period of 2 years (with a 2-year fixed interest rates) which would generate approximately £4,530 in interest. 4.7 Members should note that if a fixed term investment is agreed there would be no access to the balance of any loan fixed for the 2-year period. Therefore, Members require to be agreed on an investment amount ensuring an adequate working balance remaining available over the period of the fixed loan. 5. Option Appraisal 5.1 The table at 4.5 provides details of options available and the financial impact of each of these options. 6. People Implications 6.1 There are no people implications. 7. Financial Implications 7.1 Other than the financial implications of the investment chosen as detailed above, there are no other financial implications arising from this report.
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8. Risk Analysis 8.1 The Committee must consider financial and reputational risks when considering such an investment. Alexander Cross Cameron Fund must continue to have access to sufficient funds to meet the level of grant awards expected during the investment period. 8.2 Interest rates are volatile, changing daily and may increase during any fixed period loan, resulting in less interest than what may have been achieved locking in at alternative dates. 9. Equalities Impact Assessment (EIA) 9.1 No equalities impact assessment was required in relation to this report. 10. Environmental Sustainability 10.1 No environmental sustainability issues require to be raised in connection with this report. 11. Consultation 11.1 Finance and Legal have been consulted prior to finalising this report. _______________ Laurence Slavin Chief Officer, Resources Date: 21 August 2025 Person to Contact: Janine Corr, Business Partner, Corporate Functions E-mail: Janine.corr@west-dunbarton.gov.uk Appendices: None Background Papers: None Wards Affected: Wards 4, 5 and 6