Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Investment risk is pan-sector dilemma

  • Comment

Welcome to this first column in a series that will focus on the broad theme of partnerships - whether they be public-public or public-private ventures.

I wanted to kick off with a reflection on a similar dilemma both sectors face -whether working in partnership or singularly - and that is when to take the investment risk.

Once again bankers’ bonuses have dominated headlines. Once again debate has surfaced around plans to restructure the banking sector, moving the risky gamblers away from the ‘high street’ operations.

It is against this backdrop that I stop and think about my role as chief executive of a county council. On the one hand I am responsible for the largely artificial setting of a £1bn budget. I am supposed to know 12 months in advance where I am going to spend every last penny, while at the same time taking no financial risks and ensuring I take out my 28% contribution to the austerity agenda.

On the other hand, I am also supposed to be taking huge financial risks. I am supposed to be stimulating the sustainable prosperity agenda with local infrastructure investment and the like, using high-risk borrowing mechanisms reliant on growth in a volatile market. I embark on this work with no substantial reserves, let alone the prospect of central bank bailouts to fall back on.

Such activity goes on, coupled with the rampant inflation of adult social care constantly demanding all the efficiencies made elsewhere in our organisation.

Consequently, increasing the bottom-line cost of borrowing is not sound business sense for ‘my high-street retail arm’ - to quote banking parlance.

Unlike my private sector colleagues working out whether to invest or not, the returns on our investment will go to others - although like many of you I am searching for the golden egg of a recycling capital fund.

As CEO, do I advise to lead and directly stimulate our economy, which I strongly believe we should all be doing? Or do I really have to continue to scrape every barrel and innovate in every way possible just to meet social care bills?

This is not just a prosperity/austerity agenda. It is a societal v age and wellbeing dilemma with no bonus regardless of whether we get our investments right or wrong.

Paul Blantern, chief executive, Northamptonshire CC

  • Comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions.

Links may be included in your comments but HTML is not permitted.