GIVE US BACK OUR MONEY SAYS THE DAME!

Fortunately for readers, the Dame is a graduate of a well-known Swiss finishing school, Institut Château Beau-Cedre, where she got a Double First in Applied Household Economics. 
She rejected a place at Girton as not being sufficiently academic 
With this 'degree' under her voluminous belt, she is well qualified to take a forensic look at how the cat loving bachelor finance chief, Warwick Lightfoot has been handling 
our money.

At the end of 2015 total investments (including reserves and cash surpluses) amounted  to £327 million and yielded 0.45%.  
Adding to the absurdity of the situation, the council also has borrowings of £154 million, on which it pays an average interest rate of 6.75%.  
It can only escape this burden by paying substantial penalties for early repayment. 

It's justifiable keeping a proportion of these reserves on short term call but the rest should be invested for the longer term. Longer-dated gilts yield has been very high over the last decade as interest rates have collapsed after the crash (and now Brexit) and so we residents have been badly hit!

So, why did the Council 'lock in' to punitive interest rates of 6.54% when receiving a miserly 0.38% on reserves?
And so why does it not return the majority of reserves to residents? 
After all, this and previous governments have been strident in telling councils to use reserves for the benefit of taxpayers. 
At the moment they are being used by the international banking industry.

In response to the comment asking what difference it would have made to adopt a different strategy, this PAPER sets it out: 

Over the past five years the total return on a basket of long dated gilts (5 years plus to maturity) was 50%.  Had the council invested £200 million in long dated gilts five years ago, it would now have £300 million to play with.  However this is a strategy that would not work over the next five years because interest yields are now rock bottom.  

An ex-City banker resident advised the Dame,

INTERNATIONAL BANKERS
SHAKE DOWN THE COUNCIL

"a few weeks ago Cllr Paget-Brown tried to justify the sizeable reserves the council has accumulated.  He was very critical of those who felt that some of these reserves could be used to forestall the council’s progressive cuts in services to the vulnerable living in the borough.  

The reserves amounted to £251 million at the end of 2014.  

If the council had pursued a more sensible approach to the management of these reserves, it could have maintained services at their previous level without actually dipping into the reserves at all.  The council’s latest budget shows that it earned only 0.38% on its reserves last year, continuing the low returns received on these reserves in previous years.  This poor outcome arises because most of the reserves are invested in low-yielding short-dated gilts (government securities).  

A much higher rate of return could have been achieved by investing most of the reserves in longer-dated gilts offering the same security to the council.  
There was no need to hold such a large proportion of the reserves as liquid assets, and these low returns mean that the real value of the reserves has been progressively eroded by inflation.