17 December 2024 – Minutes (draft)

THAME TOWN COUNCIL

Minutes of a Meeting of the Corporate Governance Committee held on 17 December 2024 at 6.30pm in the Upper Chamber, Thame Town Hall.

Present:

Cllrs D Bretherton (Deputy Chairman), N Champken-Woods, P Cowell, M Dyer (Chairman), D Dodds, S McGarry, H Richards and P Swan.

Officers

M Sturdy, Town Clerk
K Slater, Corporate Services Manager & Responsible Financial Officer (RFO)
Services & Processes Officer

1) Apologies for Absence

Apologies for absence received from Cllrs Dawson (personal), Dite (personal) and Gilbert (council business).

RESOLVED:

To accept the apologies and reason given from Cllrs Dawson (personal), Dite (personal) and Gilbert (council business).

2) Declarations of Interest and Dispensations

There were no declarations of interest or dispensations.

3) Public Participation and Public Questions

There were no applications to address the Committee.
There were no questions put to the Committee.

4) Investment Portfolio

Mr Weston-Davies presented the committee with the annual investment portfolio review on behalf of Rathbones. The Town Council’s portfolio service level is discretionary, meaning that Rathbones makes investment decisions in line with the Town Council’s objective of capital growth and a risk strategy level of 2 (out of 6). The portfolio value is currently £1.7million with an estimated annual income of £33,000 and yield of 1.9%.

Looking at the portfolio’s performance, over the last 5 years the portfolio has performed well, however the volatility seen in 2022, due to the return of inflation after Covid-19, is reflected in the 3-year performance of the portfolio. Positively the portfolio has performed well in the last year. The political and economic situation in America has had an impact and is being monitored to assess its long-term impact. Rathbones are also monitoring the underlying value of the companies in relation to their stock market value, as well as level of exposure in the portfolio. It is expected that there will be volatility in the market over the next four years.

It was noted that whilst the FTSE All Share had performed better than the portfolio over the last 5 years, it had experienced significant volatility which would have been difficult to manage.

A portfolio’s level of risk is calculated depending on the contributions of the three asset classes: liquidity, equity-type risk and diversifiers. Whilst the portfolio’s risk strategy is 2, Rathbones continually monitor risk in the global context and recently have intentionally adopted a more cautious approach.

Recognising the importance of responsible investment, Rathbones aims to integrate environmental, social and governance (ESG) principles into the portfolio, as well as using their vote to make changes such as voting against BP renumeration policies. Rathbones also engages in ESG challenges where there will be consequences and is transparent in their activities.

Overall, it was pleasing to see a rebound in the portfolio following a difficult few years. Rathbones had intentionally been cautious with the level of risk. Examples of future challenges include the new US president and rise in AI.

A question was raised as to what tangible action Rathbones take? Rathbones work with other investment managers to have a bigger impact on large corporate and governance organisations. Whilst not every attempt is successful, continuing to apply pressure will have a greater impact.

A question was raised as whether too much of the portfolio is American based. The US equity market equates to 75% of the global equity market, however there is an aspiration to increase exposure in Asia.

Rathbones will provide Councillors with the methodology used to calculate the 9.3% return as there was some confusion as to how this figure was reached.

The percentage of fossil fuel reserves in the portfolio is 4.7%, however the exposure to alternative energy is 0.1%, does this represent ESG values? Fossil fuel investment continues to decrease and will continue to be closely monitored by Rathbones; however, the portfolio will continue to be globally diverse and have fossil fuel exposure until otherwise directed by the Town Council.

Rathbones will check what is meant by ‘Catholic Values Non-Compliant’.

Cllr Swan was disappointed to see that the portfolio still has some investment in tobacco. It was noted that this makes up 0.5% of the portfolio and reflects the portfolio being diverse. It was agreed this would be a matter for the council to decide as part of its Investment Policy.

5) Investments Update

Councillors noted the summary of the investment performance, which overall was performing as well as could be expected.

Councillors agreed that Rathbones should provide clarification on how the portfolio’s return had been calculated.

6) Minutes

The Minutes of the Committee Meeting held on 30 July 2024 were received.

RESOLVED that:

The minutes of the meeting held on 30 July 2024 are confirmed as a correct record, and signed by the Chairman.

7) Financial Update

Members received the budget summary and balance sheet up to 31 October 2024.

Councillors complemented the new budget summary format.

It was noted that the comment regarding the precept was incorrect as 100% has now been received.

It was clarified that the expenditure on the ‘car parks’ budget line related to the purchase of permit scratchcards to cover a 4-year period, which the Town Council will sell and generate an income from.

It was clarified that the expenditure on the ‘grants’ budget line related to the £6,500 annual grant to Citizens Advice Thame and the remaining is recharged relating to free-use of the Town Hall facilities.

It was noted that the expenditure on the ‘community activities’ budget line was at 90% due to forward funding public art which will repaid from S106 monies.

It was noted that the earmarked reserves in the balance sheet is showing as amalgamated but has since been split out as requested by Councillors.

8) Financial Overspends

Councillors noted the following financial overspends against budget line items (greater than the agreed de minimis of £100 / 5%) have been recorded since the last meeting:

a) Museum Roof – overspend £42,000-£49,000. This was funded from:

Earmarked Reserve (333 museum maintenance) for £13,315,
Earmarked Reserve (327 Renewals (pot for new lift or tractor / van etc.)) for £18,364,
Earmarked Reserve (381 contingency (pot for emergencies)) for £9,043,

With the balance (approximately £5,000-£7,000) to be taken from Rolling Capital Fund.

b) Depot Maintenance – £3,129

Cost of a Condition Survey (Earmarked Reserve 332 will cover overspend)

c) Rycote Meadow Footpath – £10,653

This will be claimed back via S106 funds.

9) Community Infrastructure Levy Report

Councillors noted the income and expenditure report submitted to the District Council for 2023-24.

10) Utilities Analysis

Councillors received and noted the utilities analysis report.

The water charge at the Depot had increased due to having to change suppliers from Thames Water to Castle Water. Thames Water had incorrectly recorded the Depot as residential and cannot supply non-residential properties. The new charge is slightly higher but still within budget. All council properties are now supplied by Castle Water.

11) Devolved Services Grant

Councillors received and noted the financial accounts for the year ended 31st March 2024 from Thame Senior Friendship Centre.

It was noted that the Town Council grant is the only grant which the Senior Friendship Centre receives and is essential for their continued operation.

12) Town Hall Utilisation (including Free Use / De Minimis Delegated Authority)

Councillors received the utilisation report of the Town Hall and facilities (including Free Use 2024-25 and equivalent cost granted by the Town Clerk through Free Use / De Minimis delegated authority).

It is hoped as part of the Thame Pride event, a cabaret-style event will be held in the Town Hall, and to use this event to promote the Town Hall as a venue. Councillors agreed that sorting the acoustics should be a priority.

The meeting concluded at 7:36pm

Signed ………………………………

Chairman, 25 March 2025